Académique Documents
Professionnel Documents
Culture Documents
Submitted to
University of Mumbai
in partial fulfillment of the requirement
For
M.Com.( Accountancy) Semester II
BY MISS.GAURI MORE
Roll No: -15-9526
DSPMS
K.V.PENDHARKAR COLLEGE,
DOMBIVLI (E)
DECLARATION
I GAURI MORE
Place: DOMBIVLI
Date
Name
ACKNOWLEDGEMENT
It is a pleasure to thank all those who made this project work possible.
I Thank the Almighty God for his blessings in completing this task. The
successful completion of this project is possible only due to support and
cooperation of my teachers, relatives, friends and well-wishers. I would like to
extend my sincere gratitude to all of them.
I am highly indebted to Principal Dr.A.K.Ranade, coordinator prof.P.V.Limaye
and my subject teacher Dr.Rajshree Deshpande for their encouragement,
guidance and support.
I also take this opportunity to express sense of gratitude to my parents for their
support and co-operation in completing this project.
Finally I would express my gratitude to all those who directly and indirectly
helped me in completing this project.
.
.
(Name of student)
Roll No:
SR.NO
CHAPTER NAME
PAGE NO
INTRODUCTION
HISTORY
SWOT ANALYSIS
10
CORPORATE
14
RESTRUCTURING
5
FINDING
AND
29
RECCOMENSATIONS
6
CONCLUSION
30
SUMMARY
31
BIBLIOGRAPHY
32
OBJECTIVES OF THE STUDY: To study the corporate restructuring strategies adopted by Air India.
To study various factors involved in corporate restructuring.
RATIONAL OF THE STUDY: To understand restructuring strategies of Air India.
RESEARCH METHODOLOGY:I.
COLLECTION OF DATA:-
Sources of data used in the research study are gathered from internet,
journals, magazine, books which are secondary source.
II.
RESEARCH DESIGN:-
On 21 February 1960, Air India International inducted its first Boeing 707420
named Gauri Shankar, thereby becoming the first Asian airline to induct a jet
aircraft in its fleet. The airline inaugurated services to New York on 14 May 1960.
On 8 June 1962, the airline's name was officially truncated to Air India and on 11
June 1962, Air India became the world's first all-jet airline. In 1971, the airline
took delivery of its first Boeing 747-200B named Emperor Ashoka and
introduced of the Palace in the Sky livery and branding. In 1986, Air India took
delivery of its first Airbus A310-300. In 1993, Air India took delivery of a Boeing
747-400 named Konark (registered VT-ESM) and operated the first non-stop
flight between New York and Delhi
In 200001, attempts were made to privatise Air India. In 2000, Air India
introduced services to Shanghai, China. On 23 May 2001, the Ministry of Civil
Aviation charged Michael Mascarenhas, the then managing director with
corruption. According to the ministry reports, the airline lost approximately 570
million because of extra commissions that Mascarenhas sanctioned and he was
later suspended from the airline. In May 2004, Air India launched a wholly owned
low cost subsidiary called Air-India Express connecting cities in India with the
Middle East and Southeast Asia.
Until 2007, Air India mainly operated on International long-haul routes while
Indian Airlines operated on domestic and international short-haul routes. In 2007,
Air India and Indian Airlines were merged under Air India Limited. The airline
was invited to be a part of the Star Alliance in 2007.
In January 2013, Air India cleared some of its debts by selling and leasing back
the newly acquired Boeing 787 Dreamliners. Also, the airline posted its first
positive EBITDA after almost six years
On 1 March 2009, Air India made Frankfurt Airport at as its international hub for
onward connections to United States from India. However, the airline shut down
the Frankfurt hub on 30 October 2010 because of high operating costs. In 2012,
a study commissioned by the Corporate Affairs Ministry recommended that Air
India should be partly privatised. In May 2012, the carrier invited offers from
banks to raise up $800 million via external commercial borrowing and bridge
financing.
Air India became the 27th member of Star Alliance on 11 July 2014. In August
2015, it signed an agreement with Citibank and State Bank of India to raise $300
million in external commercial borrowing to meet working capital requirements.
As of 2015, Air India is the third largest carrier in India, after IndiGo and Jet
Airways.
Air India has been the largest air carrier in India in terms of traffic volume
and company assets.
It owns the most updated fleet and competent repairs and maintenance
expertise.
Its information systems are advanced and compatible with its operation and
service.
10
11
India airline industry is growing faster and will continue to grow as the
GDP increases, and the trend is predicted to continue once the slowdown
recedes.
12
13
14
Mergers / Amalgamation
Divestiture
Reduction of Capital
Joint Ventures
16
17
Spin-off
Split-up
Split-off
18
RESTORATION EFFORTS
The attempt to resurrect Air India began in 2009, when the merger of 2007 was
concluded as not helping recover the airlines losses. Alternatives to better the
situation, such as privatization, lease-outs, fleet-downsizing and Government
bailouts were offered. Other suggestions, such as corporate revamps of the
organizational policies and employee-cuts were also made. Of these offered
solutions, Government bailouts have been critiqued under the medias scanner for
most of the last three years, and not without good reason.
19
The route rationalization, leasing out of aircrafts, entry management, fuel saving
contracts, renegotiating catering contracts helped the airline to reduce costs upto
Rs 400 crore by the end of 2009. The biggest cost reduction they planned for 2010
was Rs 300 crore in human resources. Thus, the restructuring plan applied in 2009
worked in Air Indias favour. The Union cabinet in 2010 approved the first bailout
for the ailing national carrier in the form of an Rs 800-crore equity infusion the
same fiscal year.However, the Government with this bailout had clearly spelt that
any further financial help would depend upon Air India meeting various targets
essentially those pertaining to cost-cutting.
The whopping bailout -Rs 7,000 crore as a soft loan and Rs 5,000 crore as
equity infusion-was demanded to cover Air India's fleet expansion at a time when
most commercial airlines were leasing out aircrafts that have been grounded due
to shrinking load factors. Air India had used its working capital to purchase
aircrafts so far. The Governments bailout meant an extension of the carrier's
working capital by Rs 1,000,crore taking it to Rs 16,000 crore till the next bailout
came through.Given the airlines intentions to buy over 100 aircrafts at an
estimated cost of Rs 50,000 crore over the next several years, despite all its
working capital already exhausted-would lead to yet another fund infusion over
and above the one then-recently given. Thus, the decision to extend this
mammoth sovereign guarantee at a time when Air India was facing proactive
20
21
22
23
2. Product development:
Premier clubs:
The flyng return programs has four levels of membership viz, base,
silver edge club, golden edge club, maharaja club. Currently the club
membership are open globally.
Maharaja club:
The maharaja club is the highest tier in the flying return
programme. Membership of this club is on the basis of
earnings 75000 miles in a span of twelve months. Members
may also be invited to join the club on basis of their status.
Membership of club entiles members to enhanced privileges
which are:
30% bonus milege points
Additional baggage allowance
Priority chek in
Priority confirmation from waiting list
Lounge acess at selected airports.
24
25
26
3. Marketing initiatives:
Companion free scheme:
Domestic
Passengers traveling on full economy/executive/first class
fares could take accompanying spouse/children/parent for
free of cost in the same class and flight, while traveling on
domestic sectors by paying passenger service fee/user
development fee on free tickets.
International
The offer was valid for travel between following countries
India-UK/Canada/US/Europe
Special companion free scheme:
It was launched whereby passengers buying a ticket on the highest
market fares in first/ executive class between india and all
international destinations, without any incentive, would be entitled
to a companion ticket at 50% of same fare.
Preferred agent programme:
It was launched in 2009-10.the agent were incentivized on achiving
a growth in market share on air india .
27
4. Future strategy:
Turnaround plan/going concern:
The main vision of turnaround plan was to make air india leader in indian
aviation and indian ambassador to the world. The corporate vision is to
deliver the highest quality of service around the world and be the epitome
of indian hospitality and to be indians flag carrier and provide seemless
travel within india and around the world.
28
29
CONCLUSION
Air India from its inception until now has evolved into a massive
organization. Air India has seen a stagnant growth, but after the policy
changes done. Air India has seen an impressive boom.
Indian turnaround is one of the greatest turnaround strategy in history of
India.
30
SUMMARY
This project looks at the corporate restructuring that Air India had gone through.
Air India has gone through every possible restructuring strategy.
This project also looks at the successful restructuring strategy of Air India and
the subsequent highs that the Air India achieved as it sustained its remarkable
restructuring strategy strategy.
The entire restructuring strategy has been divided into various parts.
31
BIBLIOGRAPHY
BOOKS:M.Com I- Business Policy Strategic Management
WEBSITE:http://www.google.com
http://www.airindia.in
www.scribd.com
32