Empathy Case

515-071-1
AIR INDIA – UNDOING SERVICE FAILURE

Case study
Authorised for educator review use only by Nidhi Mathur, Jaipuria Institute of Management, Ghaziabad. Expiry date 25-Jan-2022
This case was written by Dr Mukesh Kumar, Assistant Professor, IIM Raipur and Dr Sanjeev Prashar,
Professor, IIM Raipur. It is intended to be used as the basis for class discussion rather than to illustrate
effective or ineffective handling of a management situation.
© 2015, IIM Raipur, INDIA
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515-071-1
This case was written by Dr Mukesh Kumar, Assistant Professor, IIM Raipur and Dr Sanjeev
Prashar, Professor, IIM Raipur. Compiled from published sources, the case is intended to be
used for case discussion.
Air India – Undoing Service Failure
On February 15, 2015, Air India was trending on the social media sites for mishandling of its
passengers.1,2 This was an outcome of the video that had gone viral on social media sites,
showing a furious argument between a few passengers and staff members of the airline. The

video of the episode had six hundred thousand views and 29,000 shares within two days of
the upload.3 Air India responded to the flurry of accusations on social media sites through its
official Twitter handle:
“Air India is distressed at the video on social media showing its airport staff in poor
light. The matter is being examined and we request our patrons to review details on
the ticket and any update communicated to them.”4
Even though the company immediately assured of a fair enquiry into this matter, the
accusations continued to pour in.
Air India
Founded by the Government of India in 1953 after taking over Tata Airlines from the Tatas,
Air India Limited was headquartered in New Delhi, India. The company’s vision manifested
its desire to become the leader in Indian aviation and India’s ambassador to the world. Till
mid-nineties, it operated in Indian skies as a monopoly. Under its drive for privatization, the
government attempted to privatize Air India in 2000-01, but in vain.5 Aimed at cutting down
costs and becoming competitive, the government merged Indian Airlines, its domestic airline
with the international airline, Air India in 2007.6 This business restructuring was expected to
make the new entity more efficient besides yielding annual savings of INR5 billion

1 “'Insensitive' Air India Staffers Face Social Media Backlash as Video Goes Viral,” IBTimes, February 17, 2015,
http://www.ibtimes.co.in/insensitive-air-india-staffers-face-social-media-backlash-video-goes-viral-623720, accessed on
March 1, 2015
2 “How Air India staff ill-treated their passengers in Mumbai!,” IndiaTV News, February 17, 2015,
http://www.indiatvnews.com/buzz/mouthful/air-india-staff-ill-trea-passengers-at-mumbai-airport-video-78.html, accessed
on March 1, 2015
3 “Air India 'Distressed' by Viral Video of Staff Refusing to Let Angry Passengers Board,” NDTV, February 17, 2015,
http://www.ndtv.com/offbeat/viral-video-air-india-staff-refuse-to-let-angry-passengers-board-740165, accessed on
March 1, 2015
4 Ibid
5 “India privatisation plans near collapse,” BBC, September 3, 2001, http://news.bbc.co.uk/2/hi/business/1523153.stm,
accessed on March 1, 2015
6 “Maharaja in chains,” Business Today, May 29, 2011, http://businesstoday.intoday.in/story/air-indiaindian-airlines-
merger-behind-troubles/1/15519.html, accessed on March 1, 2015
2
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(US$113million). However, the losses continued to mount from INR12 billion (US$ 300
million) in the first year to INR55 billion (US$1.2 billion) in the third year.7 Various
subsidiaries of Air India included Air India Express, Air India Regional, Air India Cargo,
Aryan Cargo Express and Pawan Hans.
Air India operated through two major domestic hubs at Delhi and Mumbai airports and
secondary hubs at Chennai and Kolkata.8,9 Over the years, the company had strengthened its
fleet to 112 airplanes. The fleet included prestigious B787 Dreamliner.10 By 2014, the carrier
was serving 60 domestic and 31 international destinations in 19 countries across Australia,
Asia, Europe and North America.11 A member of Star Alliance, Air India operated as a full-
service airline. It served meals on all classes of travel in its domestic circles. Like other
airlines, Air India also extended the online check-in feature, which was available 48 hours
before flight time.

In light of the competition posed by the new entrants as well as the existing airlines that were
expanding their own fleets, the company had plans to increase its domestic capacity in the
summer schedule of 2015. The strategy included proposal to invest at least US$1 billion
buying new aircrafts. To increase its market share, it had also intended to add more flights
and routes within India.
The national carrier operated across 66 domestic and 33 overseas destinations with a fleet of
128 aircraft including that of its international budget arm Air India Express and regional
service Alliance Air. In January 2015, Air India had a domestic market share of 18.7 per cent.
Refer Annexure IV for the competitive market share of various airlines in the domestic
market.
With twenty two thousand employees, Air India had posted the earnings of INR190 billion
(US$3.16 billion) in 2013-14 and was expected to increase its revenues to INR210 billion
(US$3.5 billion) in 2014-15.12 The company flew 11.28 million passengers in 2014-15 as
against 10.30 million the previous year. The aviation industry in India had been incurring
losses over the years. During the financial year 2013-14, domestic airlines together had
posted a loss of about INR97 billion (US$1.61 billion), of which Air India had alone incurred
INR54 billion (US$0.9 billion).13 Over the 62 years of its operations, the airlines had

7 Ibid
8
“Air India vacates Nariman Point; moves headquarters to Delhi,” The Economic Times, February 15, 2013,
http://articles.economictimes.indiatimes.com/2013-02-15/news/37100980_1_air-india-nariman-point-moves-
headquarters, accessed on March 1, 2015
9
“Air India,” CAPA, n.d., http://centreforaviation.com/profiles/airlines/air-india-ai, accessed on March 1, 2015
10
“Air India Fleet,” Air India, n.d., http://www.airindia.in/fleet-details.htm, accessed on March 1, 2015
11
Ibid
12
“Star Alliance membership to boost Air India revenue,” Business Standard, June 24, 2014, http://www.business-
standard.com/article/companies/star-alliance-membership-to-boost-air-india-revenue-114062300879_1.html, accessed
on March 1, 2015
13
“Air India registers a profit in December,” Business Standard, January 12, 2015, http://www.business-
standard.com/article/companies/air-india-registers-a-profit-in-december-115011200999_1.html, accessed on March 1,
2015
3
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accumulated the losses of over INR360 billion (US$6 billion) and its debt had increased to
INR400 billion (US$6.67 billion).14
In the league of Trusted Brands, Air India was adjudged ahead of private carriers including
IndiGo in the 2015 Brand Trust Report India. The state-run airline had also bagged the
National Quality Excellence Awards for Safety and Environmental Sustainability.15
Aviation Industry in India
Regulated strictly for nearly five decades, Indian aviation was opened for private players in
early nineties. The government opened Indian skies for private companies in the 1990s. Full-
fledged private operators could start only in 1994 after the amendment of rules allowed these
operators to run only non-scheduled services. Several private players like East West Airlines,
Damania Airways, ModiLuft, however could not sustain themselves for long and they

stopped their operations in India.
Growing young population and rising disposable income were propelling the aviation
industry. Government’s efforts in building state-of-the-art airports, infrastructure and
connectivity, permission of foreign direct investments in aviation sector and entry of low-cost
airlines had also spurred the expansion of the civil aviation in India. The number of air
travellers grew from 50.07 million in first ten month of 2013 to 55.06 million in same period
of 2014.16 With worth US$ 16 billion, the Indian civil aviation industry was ranked among
the top ten in the world. It is the world's ninth largest civil aviation market and ranks fourth in
domestic passenger volume.17 Still, Indian air traffic density was much lower at 72, in
comparison to 282 in China and 2,896 in the USA.18 It was projected that India had the
potential to become the third largest aviation market by 2020 and the largest by 2030.19
In January 2015, India had seven prominent national players and dozens of other regional
companies. Besides the government operated Air India, other airlines included IndiGo, Jet
Airways, SpiceJet, GoAir, AirAsia India and newly launched Vistara. Air Costa, was the only
company among regional airlines to have more than one percent market share.20 The total
fleet size of commercial airlines in India was 399 in 2015.21

14
http://www.mydigitalfc.com/news/bamber-dubeyb-it%E2%80%99s-now-or-never-694, accessed on March 1, 2015
15
“Air India floats tenders to hire PR firm for image make-over,” March 7, 2015, http://businesstoday.intoday.in/story/air-
india-floats-tenders-to-hire-pr-firm-for-image-make-over/1/216612.html, accessed on March 1, 2015
16
ibid
17
“Indian Airports Analysis,” IBEF, October 2014, http://www.ibef.org/industry/indian-airports-analysis-presentation,
18
“Indian aviation to attract $12.1-billion investment: Ajit Singh,” Business Standard, March 13, 2014,
http://www.business-standard.com/article/specials/indian-aviation-to-attract-12-1-billion-investment-ajit-singh-
114031200678_1.html, accessed on March 1, 2015
19
“Indian aviation sector has the potential to be number one globally by 2030,” accessed on March 1, 2015,
http://www.kpmg.com/IN/en/Press%20Release/Press-Release-Indian-Aviation-Report.pdf, accessed on March 1, 2015
20
“40 Years Ago...And now: Air travel - Fixed fares to dynamic pricing,” Business Standard, February 8, 2015,
http://www.business-standard.com/article/pf/40-years-ago-and-now-air-travel-fixed-fares-to-dynamic-pricing-
115020800782_1.html, accessed on March 1, 2015
21
“Indian Scheduled (and Non-scheduled jet operators) Air Operators - Fleet Quick Reference Data,” KnowIndia, n.d.,
http://www.knowindia.net/aviation7.html, accessed on March 1, 2015
4
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The arrival of the private airlines brought along enough focus on customer service, on-time
performance, faster baggage delivery and improved inflight service.22 Under the existing
regulation, air fares are not regulated by the government and airlines are free to fix
reasonable charges/fee subject to compliance with Aircraft Rules 1937.23
In January 2015, as per Directorate General of Civil Aviation (DGCA) report, the number of
passenger complaints against GoAir stood at 6.2 per 10,000 passengers followed by
SpiceJet's 3.1, Air India domestic operations (2.1) and AirAsia India (1.8).24 The 252
complaints registered against Air India fell in the categories of customer service (95), flight
problem (80), baggage (43), staff behaviour (21) and refund (13). While all other airlines had
closed the complaints registered against them, the airline still had 81 open complaints against
them.25
The Episode

On 14 February 2015, the fiasco for Air India began with the uploading of video by Mr.
Shivendra Namdeo, a passenger, on Facebook. The description on his Facebook page said,
"As per the message from Air India, one should report within 45 minutes from
departure and even though PPL (read people) are 55 minutes before departure. They
are not allowed to enter."26,27

The passengers in the video claimed to have reported at the international terminal (T2) of the
Chhatrapati Shivaji International Airport, Mumbai, India for a Mumbai-Delhi flight fifty-five
minutes before the flight’s departure. The Air India staff declined their check-in request. The
passengers were refused the boarding as “they had reported five minutes late for the check-
in.”28 However, as per them, they had received text message (SMS) from Goibibo, the travel
agent to arrive up to 45 minutes before departure.29
This video, showing Air India staff refusing entry to passengers with valid tickets for ‘they
hadn’t reported desired 60 minutes,’ went viral within few moments of its uploading. Three
officials of Air India were shown arguing with several passengers. The following is the

22
Ibid
23
“DGCA to keep eye on air fares to check 'exorbitant', 'predatory' pricing,” Business Today, March 14, 2015
http://businesstoday.intoday.in/story/dgca-to-keep-an-eye-on-domestic-airlines-air-fares/1/216920.html, accessed on
March 19, 2015
24
“GoAir gets most customer complaints in December,” Business Standard, February 4, 2015,
http://businesstoday.intoday.in/story/goair-gets-most-customer-complaints-in-december-2014-aviation/1/215328.html,
25
“Performance of domestic airlines for the year 2015,” DGCA.nic.in, n.d.,
http://dgca.nic.in/reports/Traffic_reports/Traffic_Rep0115.pdf, accessed on March 1, 2015
26
“Air India officials offer lesson in how not to treat your passengers,” Firstpost, February 17, 2015,
http://www.firstpost.com/india/watch-air-india-offers-a-lesson-in-how-not-to-treat-your-passengers-2103803.html,
27
“The Air India Staff Just Shocked The Passengers With Their Audacity,” India Times, February 16, 2015,
http://www.indiatimes.com/videocafe/the-air-india-staff-just-shocked-the-passengers-with-their-audacity-230278.html,
28
“Air India staff's 'insensitivity' video goes viral,” India Today, February 16, 2015, http://indiatoday.intoday.in/story/viral-
video-air-india-staffs-insensitivity/1/419211.html, accessed on March 1, 2015
29
“This video shows how unhelpful the Air India staff was while dealing with the passengers who had arrived 5 minutes
late,” IBN Live, February 16, 2015, http://ibnlive.in.com/news/watch-this-video-shows-how-unhelpful-the-air-india-staff-
was-while-dealing-with-the-passengers-who-had-arrived-5-minutes-late/528806-79.html, accessed on March 1, 2015
5
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textual representation of the argument between passengers (Pax) and the company official
(CO):
Pax 1: Perfect, perfect Sir, give us a solution.
CO 1: The solution is this, you go to the domestic airport.
Pax 1: That is not the solution. I have paid INR5, 000 (US$83) already. I will pay
INR15,000 (US$250) more?
CO 1: You will have to pay the difference.
Pax 2: The difference? You don’t try and give me technical terms.
CO 1: Nothing is free boss. Nothing is free now. Once you are late, you lose the
ticket.
Pax 2: We are late by 5 minutes and we are not even late as per your message.
Pax 1: We are not late. You say report one hour before here, but the message you sent
says report 45 minutes before. I came 55 minutes before.
Pax 3 (voice): we are here for almost an hour.
Pax 2: You don’t accept your mistake. You can’t do anything. This is your

responsibility. Get us accommodated or refund our money. We don’t have
excess of money.
CO 2: (Not audible, but seems to be talking to the passengers).
Pax 2: If there is a bomb planted in the flight, the flight could be delayed by an hour?
Flights are generally delayed, aren’t they?
Pax 3: We are here for one hour. Love it, love it, this is what you guys wanted to see.
And he’s having fun! (Referring to the reaction of officials to the female
passenger sobbing at the counter)

Pax 3: She has been wailing for so long and you are still not paying attention to her
(referring to a female passenger in the video)
Pax 1: You want people to beg and plead to you?
Pax 4 (female): I have an exam. Please sir, I have an exam (keeps sobbing and
pleading)
Pax 1: This **** (referring to CO1) says, you have lost your ticket. Pay more. We
can’t
help it.
CO 2: Don’t use abusive language.
Pax 1: He (referring to the first employee) doesn’t care. He doesn’t bother. Somebody
has
got an exam today. He is not bothered for the last 45 minutes.
CO 1: Madam, don’t cry! Madam don’t cry!
(The female continued to cry and plead with the employee. CO1 folds his
hands and asks her not to cry).
CO 3 (female): Madam, please control yourself.
Pax 3: Madam, if you daughter cried and pleaded with you like this, what would you
do?
Pax 1: She would let her in.
Pax 3: Madam, tell us, what would you do if your girl cried so bitterly and pleaded
with
you?”
Pax:1: Somebody, please do something. Call someone.
6
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The social media was abuzz with reactions. The outpour was massive. Some of the public
reactions to the viral video on social media were:30
“...I doubt their complaint will even get accepted in the consumer court... They have
reported late.”
“Wow. I mean seriously? The problem with these fat, rusty oldies "elders" is they
think they are very strict with things and like to show off their attitude by being rigid.
Who gave them the permission to say no? Did they even bother consulting with the
other staff as to what can be done? I read the description and it's pathetic what they
did. Feel bad for the girl who was crying.”
“I just saw this video and remembered my own experience. The Air India ground staff
in Mumbai did this to me once. Because of them working extremely slow and wasting
time, I was made to wait in a queue of 8-9 persons for 25 minutes while the staff
fiddled with stuff, talked among themselves and worked at their own sweet pace. And

then after the 25 mins, they closed the counter, saying time is up and the remaining
people in the queue will not be taken on the flight.”
“I am feeling bad for the girl but the public standing around the girl shouted only on
Air India staff why they are not showing courage to pay for a new ticket for helping
her… staff are doing good job in the sense of company as a loyal staff.”
“I actually feel sad for the staff who were doing their duty and now they are portrayed
here as the bad guys.”
“I wonder if you can say the same to the exam authorities if she scored 59.9999% and
eligibility was 60% (First Class)”
“The worst employees of any air services - these government paid poppets pulling
down the Fame of India across the Globe. Every other day their flight or connecting
flight got cancelled, baggage lost, not in same flight, horrible stories you can collect
and fetch across the Air India counters both in India and abroad. Twice I have faced it
and I promised I will never travel with this flying filth from my India”
“OMG! look at the passenger crying and see how the staff is behaving. So terrible.
Shameless act.”
In response to the criticism on the social media, an Air India official on the Mumbai airport
responded in the media,
“There are 180 passengers on board, and if the flight is delayed, some of them will
miss their connecting flight. There are rules in place for a reason and it is difficult for
us to make exceptions. Every day, there are passengers who arrive late and are not
allowed to board connecting flight.”31

30
“Viral video points to Air India’s ‘insensitivity’ in dealing with passengers,” Indian Express, February 18, 2015,
http://indianexpress.com/article/india/watch-viral-video-shows-air-indias-insensitivity-in-dealing-with-passengers/,
31
“Air India’s Pathetic Online Crisis Management Is The Perfect Example For What Not To Do,” Lighthouse Insights,
February 25, 2013, http://lighthouseinsights.in/air-indias-pathetic-online-crisis-management.html/, accessed on March 1,
2015
7
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Closing
While a few sided with the Airlines and blamed the passengers for not reporting on time,
most comments on the social media talked of ill-conduct, insensitivity, unhelpfulness and
arrogance of Air India staff members. Even some of those who blamed the passengers
admitted that the staff should have been more polite and respectful. Amid the backlash from
the social media, the airline was still wondering if the assurance of looking into the complaint
would pacify the agitation in the social media and save the plummeting trust of passengers.
8
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Annexure 1: Air India Circular on Timeliness, January 30, 2015
"In case of delays occurring on account of late reporting by cabin crew, pilots or delays on
account of engineering/ground handling personnel or late catering by caterers the loss would
be recovered from them. Salaries shall be paid only after the related deductions have been
effected.”32
In response to the above circular, All India Cabin Crew Association (AICCA), the union of
the Air India cabin crew sent a letter to the management. Here are the excerpts from that
letter:
1. The biggest concern raised by the union is the lack of mandated rest period which has been
the biggest factor in souring of work relationship between crew and management off late.
Crew asserts that they are threatened of consequences when they ask for Directorate General

of Civil Aviation (DGCA) mandated rest.
2. Hiring inexperienced and unqualified staff and flying crew to handle airline. The union
alleges that there is untimely assignment of flights, pull outs after reporting time and even the
crew on leave is assigned flights leading to chaos.
3. The union further alleges unfairness at the documentation cell. This cell is responsible for
Airport Entry Pass, Crew Member Certificate, renewal of contracts, valid passport and visas.
Union says due to unprofessional approach of officials many crew sit at home without proper
approvals leading to shortage of staff.
4. Further, union has raised fingers at the training division stating that the availability of
crew is restricted in particular type of aircraft. Training batches aren't handled properly.
5. Furthermore, the AICCA even goes to the extent to say that cabin crew is even deployed in
the training department, Customer service, documentation, CCMCO even at times when there
is acute shortage of crew.
6. Besides all these, the crew association also alleges that crew movement control is also a
major problem. Flights are changed on arrival at the airport which leads to agitation and
confusion.
7. Lastly, the AICCA also blames the company transport which according to them causes
major delays at times.
Source: ‘Air India circular effect: Employees blame management for present state,’ India Today, February 3, 2015,
http://indiatoday.intoday.in/story/air-india-circular-management-blamed-aicca-aviation/1/416777.html, accessed on
March 1, 2015

32
“Air India circular effect: Employees blame management for present state,” India Today, February 3, 2015,
http://indiatoday.intoday.in/story/air-india-circular-management-blamed-aicca-aviation/1/416777.html, accessed on
March 1, 2015
9
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Annexure 2: Screenshots of the Episode
Source: “Air India staff's 'insensitivity' towards passengers,” Deccan Chronicle, February 17, 2015,
http://www.deccanchronicle.com/150217/business-latest/article/watch-insensitivity-shown-air-india-staff,
accessed on 29 March 2015
Source: “Air India staff's 'insensitivity' towards passengers,” Deccan Chronicle, February 17, 2015,
http://www.deccanchronicle.com/150217/business-latest/article/watch-insensitivity-shown-air-india-staff,
accessed on 29 March 2015
10
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Annexure III: Air India Performance
Year No. of Passengers Revenues in INR Losses in INR (US$)

(US$)
2009-10 474,776 INR153 billion INR55,510 million
(US$3 billion) (US$1233 million)
2010-11 483,247 INR140.620 billion INR68,650 million

(US$3.12) (US$1525 million)
2011-12 778,889 INR99 billion INR75,590 million
(US$2.2 billion) (US$1453 million)
2012-13 9,279,713 INR161.3 billion INR54,900 million


2013-14 10,308,696 INR177.5 billion INR53,890 million
2014 -15 11,282,359 INR215 billion INR39,000 million

(Expected (US$3.57 billion) (US$650 million)
Revenue)
Source: Air Transport Statistics available at http://www.dgca.nic.in/reports/Traffic-ind.htm, accessed on 30 March 2015;

“Acche din for Air India as it records profit after long spell of losses,” The Economic Times, January 12, 2015,
http://articles.economictimes.indiatimes.com/2015-01-12/news/57983128_1_rs-2-crore-december-2013-passenger-
revenue, accessed on March 30, 2015
Annexure IV: Market Share of Airlines in January 2015
Airline Market Share

(2015)
IndiGo 36.4
Jet Airways 19.6
Air India 18.7
Spice Jet 9.4
Go Air 8.9
Jet Lite 4.5
Air Asia 1.3
Air Costa 1
Vistara 0.2
Source: “Performance of domestic airlines for the year 2015,” DGCA, n.d.,
http://dgca.nic.in/reports/Traffic_reports/Traffic_Rep0115.pdf, accessed on 29 March 2015
11

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515-071-1

AIR INDIA – UNDOING SERVICE FAILURE

© 2015, IIM Raipur, INDIA

Usage permitted only within these parameters otherwise contact info@thecasecentre.org

Distributed by The Case Centre North America Rest of the world

Air India – Undoing Service Failure

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the ticket and any update communicated to them.”4

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Aviation Industry in India

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are not allowed to enter."26,27

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passenger sobbing at the counter)

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Annexure 1: Air India Circular on Timeliness, January 30, 2015

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Annexure 2: Screenshots of the Episode

accessed on 29 March 2015

Annexure III: Air India Performance

Year No. of Passengers Revenues in INR Losses in INR (US$)

2010-11 483,247 INR140.620 billion INR68,650 million

2011-12 778,889 INR99 billion INR75,590 million

2012-13 9,279,713 INR161.3 billion INR54,900 million

Usage permitted only within these parameters otherwise contact info@thecasecentre.org

2014 -15 11,282,359 INR215 billion INR39,000 million

Source: Air Transport Statistics available at http://www.dgca.nic.in/reports/Traffic-ind.htm, accessed on 30 March 2015;

Annexure IV: Market Share of Airlines in January 2015

Airline Market Share

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