GROUP-10

CONTENTS

 Overview on Aviation Industry

 Brief History

 Organization Structure

 Market position

 Corporate Governance

 Ethical Practices

 CSR Activities

 Suggestions
 OVERVIEW OF INDIAN AVIATION
INDUSTRY
 India has one of the fastest growing aviation markets in the
world.
 Growth rate has been 18%.

Reason for Higher Demand

1. Growing middle class and their purchasing power
2. Low airfares offered by low cost carriers like Air Deccan,
Spice Jet, Go Air
3. Growth of tourism industry in India, increasing outbound
travel from India.

3
 MAJOR PLAYERS IN INDIA
 AIR INDIA, AIR-INDIA EXPRESS

 JET AIRWAYS, JET LITE

 KINGFISHER AIRWAYS, KINGFISHER RED

 INDIGO AIRWAYS

 PARAMOUNT AIRWAYS

 GO AIR

 SPICE JET

 STAR AVIATION
4
 ABOUT AIR-INDIA

 Air India -State owned carrier and currently the oldest and largest
airline of India.
 Part of the Indian government-owned National Aviation Company of
India (NACIL).
 Operates a fleet of Airbus and Boeing aircraft serving Asia, Europe
and North America. Its corporate office is located at the Air India
Building in South Mumbai.
 16th largest airline in Asia.
 Air India has two major domestic hubs at Indira Gandhi
International Airport and Chhatrapati Shivaji International Airport.
 COMPANY HISTORY
 Air India was founded by J.R.D Tata in July 1932 as Tata Airlines, a
division of Tata Sons Ltd. (now Tata group).
 Tata Airlines became a public limited company on 29 July 1946 under
the name Air India.
 1948- Air India airline was acquired by the Govt. of India
 Airline was granted status to operate international services
 First Boeing 747-400 made history by operating the first non-stop flight
between New York city and Delhi
 In 2001, Air India was put up for sale by the then NDA Government
,one of the bids by a consortium of Tata group- Singapore Airlines .
 Plans shelved after Singapore Airlines pulled out and the global
economy slumped
 HISTORY …

 In 2007, the Government of India announced that Air India would be

merged with Indian for which NACIL was established

 2006-2007-financial crisis- losses amounting to 7200 crore.

 Sold three Airbus A300and one Boeing 747-300 in March 2009 for
$18.75 million to survive the financial crunch.
 SUBSIDIARIES OF NACIL

 Air India Cargo

 AIR INDIA ENGINEERING SERVICES

 Air India Air Transport Services Ltd for Ground

Handling services

 Hotel Corporation of India Ltd.-Hotels operate under the

name "Centaur Hotels".

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 ORGANIZATIONAL STRUCTURE

Chairman and Managing director

Chief vigilance Director - Director – Director – Director -

officer engineering finance Personnel commercial
 CURRENT PROBLEMS IN AIR INDIA
 Under consecutive political and managerial headships
Air- India suffers dangerously.

 Air India has more-than-required staff, over-aged

jets and air hostesses.

 Financial distress.
MARKET POSITION
 MARKET SHARE

Air india
Others 16%
27%

Air india
Jet airways
Kingfisher
Jet airways Others
29%

Kingfisher
28%
COMPANY’S PHILOSOPHY
 To strive continuously for attaining higher level of accountability,
transparency, responsibility and fairness in all aspects of its
operations.
 Committed towards protection and enhancement of long term
value of its stakeholders
 Integrity pact program was implemented on Feb 8th ,2008 and
made mandatory to incorporate integrity pact in respect of all
contracts with a value of Rs. 100 mn and above.
 Board of NACIL has met 7 times during the year 2008-09 to
discuss the issue significant for airline.
 Audit committee met two times during the year to review

annual accounts of the company

 ●
●Government backup

STREN
●Strong brand name
●

●
Oldest Airline
●Monopoly in certain international
●

routes

GTHS ●
Rights to travel 96 destinations
●Established infrastructure
●

●It has prime parking space/lots

●
 ●
●Poor HR Strategies

WEAK
●High cost, poor cost control
●

●Inefficient usage of resources

●

●Aging fleet
●

●Bad reputation, poor cabin services

●

NESS
●Poor aircraft maintenance
●

●Highest manpower ratio to aircraft

●

●Overpriced commission to travel agents

●

●Less advertising
●
OPPO ●
Expanding tourism industry.

RTUNI Untapped second tier cities

●

●
Geographic location
●
Lower Costs, Higher Quality

TIES
 Increasing competition from
THREA
●

private airlines
●
Entry of foreign players,
especially Middle East Aviation

TS ●

●
Economic slowdown/Recession
Swine Flu
 SEPARATION OF OWNERSHIP AND
MANAGERIAL CONTROL
 Basis of the modern corporation
 shareholders purchase stock, becoming residual claimants
 shareholders reduce risk by holding diversified portfolios
 professional managers are contracted to provide decision-
making

 Modern public corporation form leads to efficient specialization of

tasks
 risk bearing by shareholders
 strategy development and decision-making by managers
 CORPORATE GOVERNANCE
DEFINITION
“Corporate governance is a control mechanism that ensures
the optimum use of the human, physical and financial
resources of an enterprise”
 CORPORATE GOVERNANCE
MECHANISMS

 Internal Governance Mechanisms

Board of Directors
Managerial Incentive Compensation
Ownership Concentration

 External Governance Mechanisms

Market for Corporate Control
 BOARD OF DIRECTORS
Role of the Board of Directors

 Monitor – Are managers acting in shareholders best interests

 Evaluate & Influence – examine proposals, decisions actions,

provide feedback and offer direction

 Initiate & Determine – delineate corporate mission, specify

strategic options, make decisions

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 BOARD OF DIRECTORS
Executive Directors
• The firm’s CEO and other top-level managers

Non executive directors

• Individuals not involved with day-to-day operations, but who
have a relationship with the company

Independent Directors
• Individuals who are independent of the firm’s day-to-day
operations and other relationships

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 BOARD OF DIRECTORS
Arvind Jadhav – chairman and managing director
Amod Sharma – SBU head related business
Anita Khurana – SBU head cargo
S.Chandreshekar – director finance
Prashant shukul – Joint secretary , ministry of civil aviation

Independent directors – these four were appointed in March

2010

1) Anand Mahindra, vice-chairman, MD of M&M;

2) Amit Mitra, secretary general of FICCI;
3) Harsh Neotia, MD Ambuja cement
4) Retired Air Chief Marshal Fali H Major
 MANAGERIAL INCENTIVE
COMPENSATION

 Salary, bonuses, long term incentive compensation

 Stock ownership (long-term incentive compensation)

 Incentive systems do not guarantee that managers make the

“right” decisions, but do increase the likelihood that managers
will do the things for which they are rewarded
AGENDA OF CORPORATE GOVERNANCE
IN AIR INDIA
 Most ethical and corruption- free business dealings
with its Counterparties.
 Values its relationship with all Counterparties and
deal with them in a fair and transparent manner.
 Associates (employees, agents, consultants, advisors,
etc.) do not seek or take bribes / undue benefit
directly or indirectly for themselves or for third
parties.
 In a competitive tender as well as in general
procurement, NACIL will deal with all Counterparties
with equity, reason and fairness.
ETHICAL PRACTICES
 ETHICAL PRACTICES WITHIN
ORGANISATION
 Directly or indirectly (through Agent, consultant, advisor,
etc.), will not pay any bribes or give illegal benefit to any one
to gain undue advantage in dealing with the Principal,
NACIL.
 Not engage in collusion, Price-Fixing, etc. with other
Counterparties in dealing with the Principal, NACIL.
 Not pass on to any third party any of the Principal’s
confidential information unless authorized by the
organization. 
 Will not make any false or misleading allegations against
NACIL or its Associates.
 VIGILENCE DEPARTMENT

 Vigilance department of NACIL is headed by the 

Chief Vigilance Officer Smt. Urmila Subbarao, IAS
assisted by Dy.Chief Vigilance Officer Sri Ashutosh
Dumbare, IPS
 The main aim of vigilance department is to initiate steps
to curb corruption and malpractices in the organization
 FUNCTION OF VIGILENCE DEPT.
 Monitor progress of action recommended by Vigilance against
such employees
 Study and examine Systems & Procedures followed in various
departments, identify corruption prone areas and suggest remedial
measures to minimize scope for corruption or malpractices
 Maintain Surveillance on personnel posted in sensitive /
corruption prone areas
 Draw and ensure implementation of Action Plan on anti-
corruption measures.
 Organize, conduct surprise checks in sensitive & corruption prone
areas
  Prepare list of employees of doubtful integrity

 Maintain Surveillance on employees of doubtful integrity

CORPORATE SOCIAL
RESPONSIBILITY
 ENVIRONMENT PROTECTION

 Awareness raising activities related to:

 Ozone layer protection
 Conservation of Energy, Forests, and other natural resources
 Done through:
 In-flight magazines and videos
 Competitions & awards related to awareness
 Hosting discussions on climate change related issues
 Took action within its business operations to improve energy and
efficiency
 DETAILED ACTIVITIES IN
ENVIRONMENT FRONT
 In-flight magazine: Namaskaar

 Environment films with the help of TERI & UNEP

 Cartoon film “Ozzy Ozone” screened in flight & Held a painting competition
on same

 Conference on“Sustainable Consumption and Production”

 become a member of the Business Council for Social Development

 Signed an MOU with GE as part of the Eco Imagination Programme of GE.

 Hosted discussions on climate change related issues

 REACHING OUT PROJECT
 Encouraging students and teachers ‘towards responsible
and active citizenship’ & preserving a crumbling
environment
 RANK (Race for Awareness & Knowledge)

 BOLT (Broad Outlook Learner Teacher)

 Designed to promote creative thinking and leadership among

the students and teachers in areas of societal development
 AIR INDIA’S CSR GESTURE
 CSR Mission in association with the Centre for Blind Women :
Rehabilitating and making blind women independent.

 Arranged for seven blind girl children from the National

Association for the Blind to fly from the Capital to Chandigarh
and back
 SOME AWARDS IN THE FIELD OF
CSR RECEIVED BY AIR INDIA
 “Galileo Express Travel World Award”- for most significant
corporate Social Responsibility initiative taken by an
organization , 2006

 “Golden Peacock Award” – for Corporate innovation for

protection of environment, 2007

 Montreal Protocol: Public Awareness Award, 2007 Presented by

the United Nations Environmental Programme (UNEP)
 SUGGESTIONS

 Creating awareness of brand values and establishing link with

the society at all levels.
 Make standards in Punctuality, as many customers
complained about timing issues
 Lack of customer friendly approach leads to lose of customer,
which should be averted in order to restore customer belief in
services
 People seek better in flight entertainment
 Try to reduce the overheads by workforce reduction.
 HR department should make some standard age bar for the
crew and for work domain where judgement of work efficiency
is done on the basis of age.
 WEBLIOGRAPHY
 www.wikipedia.com
 www.stockwatch.in

 www.home.airindia.in