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Air India Crisis Essay

3145 words - 13 pages

Problems:
1. Was not prepared for competition it started getting after the liberilastion of the economy in 1990.
2. Bloated workforce. Air india has 28000 permanent work staff , doubles jets head count. It operates 127 aircraft , compared with jets 115.
3. Highest employees per aircraft in the world. 200:1 whereas desirable is 130-170 :1
4. Bad management and faulty policies has brought air india to this crisis level.
5. A culture of complete sloth in administration.
6. Complete lack of ownership.
7. Lack of responsibility for results and failures.
8. Deeply ingrained corruption in all levels.
9. Instead of renting out unused iconic portions of Nariman ...view middle of the document...

Recent strategic implementations:
1. From june 15 to July 25 , A1 launched an economy class package worth Rs.30000 and also a business class package worth Rs. 50000 which will allow passengers to enjoy unlimited number of flights along the length and breadth of the country.
2. Long pending salaries of the employees would be disbursed by the end of june 2011
3. Company in talks with 26 banks to restructure debt.
4. The latest plan would focus on a hub and spoke route model , cut costs by redeplying staff and unload non core real estate.
5. According to the restructuring plan part of the debt would be converted to long term loans at fixed rates of interest.

Introduction:
Air India (Hindi: एअर इंडिया) is the flag carrier airline of India. It is part of thegovernment of India owned Air India Limited (AIL). The airline operates a fleet of Airbus and Boeing aircraft serving Asia, Australia, Europe and North America. Its corporate office is located at the Air India Building at Nariman Point in South Mumbai. Air India has two major domestic hubs at Indira Gandhi International Airport and Chhatrapati Shivaji International Airport. An international hub at Dubai International Airport is currently being planned.[1]
Air India has the fourth largest share in India's domestic air travel market, behind Jet Airways, Kingfisher and IndiGo.[2] Following its merger with Indian, Air India has faced multiple problems, including escalating financial losses[3]and discontent among employees.[4] Between September 2007 and May 2011, Air India's domestic market share declined from 19.2% to 14%, primarily due to stiff competition from private Indian carriers.[5][6] In August 2011, Air India's invitation to join Star Alliance was suspended due to its failure to meet the minimum standards for the membership.[7] In October 2011, talks between the airline and Star Alliance have resumed.[8]
The only Maharaja who did not lose his privy purse after 1971 was Air India's [ Images ] and Bobby Kooka reminded us of that on the hoarding in front Air India's Nariman Point headquarters, by quipping "Not with my privy pursers, you don't!".
The Maharaja has now lost it all - the sheen of his yellow red striped head gear and shine of the brass buttons on his red sherwani. He is no longer able to serve caviar garnished with crumbled, hard-boiled egg and chopped onion on lightly buttered toasts and vodka or Blue Label to his 'preferred guests', their families and office clerks who travel in his first-class home by paying only the 'full fare' economy class fare through a very highly secretive but effective process called 'upgradation'. The government has been busy of late (actually pretty late) to repair the Maharaja's clothes and, if possible, buy him some new ones.
As expected the government's belated response has been three-fold - the first one is the traditional stereotyped response of the Government called 'find the scapegoats'. Like the queen in Alice in...

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