Air India

Revival Strategy
Air India Case Analysis


 The main problem with Air India is not poor financial
health, its poor governance and failure of leadership.
 A transformational change is needed, financial
restructuring without a deeper organizational
restructuring will not work.

Areas to Focus
 Hospitality
 Yield management: close the gaps between the best in the
industry by benchmarking
 Synergize Manpower
 Cost Leadership
 Continue efforts to maximize cargo profits
 Vision:
 By 2016, Air India will be one of the most successful
international airlines in the world providing service
excellence and providing the only authentic Indian
hospitality experience.
 Mission
 To be dedicated to the highest standards of customer service

excellence, and to be dedicated to providing the Indian

hospitality experience

Strategy

Corporate
Functional
Operational
Corporate Level Strategy
 Appoint CEO with a global mindset and proven capabilities
 Review routes, categorize them into clusters as per their business regions
and if the route is losing money (cash contribution level) then cut
unprofitable routes immediately
 Inorganic Growth opportunities: Expand hubs and partnerships with other
airlines (code sharing and interline partnerships)
 Global Alliances
 Manpower Rationalization
 Transition from an 'administrative ministry-managed company' to a
'board-managed company’
 Focus on Performance + Accountability
 Reverse the myth since it failed terribly for Air India : Keep customers
happy & employee happiness will follow
 Building sustainable relationships with all stakeholders.
 Functional to Matrix Structure (project based, dual reporting)
 Change in top management
 Differentiate: Indian Hospitality (USP)

Functional Level Strategy
 Greater Process Orientation
 Alignment with SOP
 CRM
 Transparency
 HR: Perform or Perish policy
 Stepping up Frequent Flier Programme
 Renegotiate landing slots
 Merging of departments; eg. HR & Training, Sales & Reservations & Bookings
 Increase level of awareness
 Cost Leadership
 Rebranding
 Reengineering: Up gradation of IT, Infrastructure and communication technology,
evolving new HR Policies and practices and employee productivity enhancement
modules
 Job Rotation
 Create a Air India Culture Committee: Comprised of people from all geographic areas
and levels of the company.  The committee will meets four times a year, and will be
charged with preserving and enhancing the company culture.

Functional Level Strategy…
 Compensation System: There will be variable pay plan and the pay of the employee
will be directly linked to his performance.
 Key Operational Performance Indicators
 High Quality guest service.
 On time flight operations.
 Completion rate - the percentage of scheduled flight legs completed.
 Baggage ratio - the number of delayed or lost baggage files per every 1,000 guests
flown.
 Product up gradation
 Pre-mature retirement of old aircraft, including leased aircraft, and their
replacement with a newer fuel efficient fleet.
 New aircraft with best-in-class passenger amenities.

Operational Level Strategy
 Service Orientation
 Policy Changes
 Pay for performance
 Zero up gradation policy
 Productivity linked wage settlement with unions
 Employee Engagement
Phase wise Roll out plan

Focus on Survival Focus on reducing lossesHealthy operating margins

– Deliver the ‘future’ Air India
Thank you