The Fall Of The World's Best Airline: A

Case Study Of Air India

Group Members
Bubeshwar Jayaprakash (8914475)
Army Sojitra (8193888)
Kenechukwu Uzor (8842240)
Navjot Kaur (8912270)
Udhaya Mahendran (8941262)
Agenda
 Overview and history of the Company………………………………… 3 - 4
 Contributing Factors and Major Turning Points……………………….. 5
 Interesting facts about Air India ………………………………………… 6
 Leadership Style of the Company’s Management………………..... 7
 Challenges and strategies faced and implemented by Air India.. 8 - 10
 Company’s SDG initiatives ……………………………………………….. 11 - 12
 Air India’s Recovery ……………………………………………………….. 13 - 14
 Overview and History of the Company

 Air India is one of India’s oldest companies with over 90 years in existence. It was a
private company (initially) formed by J.R.D Tata in 1932. It was named as Tata Air
Services at its commencement.
 He had a vision to build an industrial empire and it grew when he visited Manchester in
1877 and saw the massive Industrial Revolution. Air India’s initial service was to deliver
weekly mail between Karachi and Madras via Bombay and Ahmedabad. Interesting fact:
J.R.D Tata was the first licensed pilot in India.
 Tata Group contains a lot of subsidiaries and product portfolios but our topic for today is
Air India. In 1948, Air India became the first airlines in Asia to operate its first ever
international flight from Mumbai to London.
 Air-India, the airline founded in 1932 (as Tata Airlines) grew and become an Indian
leading International Airline with headquarters in Mumbai.
 It serves both local and International routes like southern and eastern Asia, the Middle East
, Europe, Africa, Australia, the United States, and Canada.

Source: https://www.britannica.com/topic/Air-India
 Overview and History of the Company

 Later on as Tata Airlines, it started off to serve as a passenger carrier with its first flight
from Trivandrum to Bombay. The airline has also helped the Royal Air Force in World War
II with troop movements, delivering supplies and rescue of refugees.
 Post Independence, Tata Airlines went public with its name as “Air India” Also,
Government of India took 48% stake in Air India around 1948. In 1953, by the passing of
Air Corporations Act, Air India was nationalized and completely under the management of
Government of India.
 Post Liberalisation in the dawn of the 21st century, Air India merged with Indian Airlines
and formed Air India Limited. Air India faced huge losses increasing exponentially
annually. This is due to the decreased standards, delay in process both internally and
externally.
 Contributing Factors and Major Turning
Points
 Factors contributing to the downfall of Air India:
• Mismanagement by the Government of India which included corruption, red-tapism and other beauracracy
related lethargies and mismanagements. Air India was managed by IAS (Indian Administrative Services)
officers with almost little to nil experience in the airline industry. Another major factor includes the
unionisation of the employees, as most of the Nationalised organizations have unions.
• Poor decision-making: Poor and delayed decision-making and lack of quality implementation resulted in
the downfall of the airlines. Some of the decisions which include the purchase of expensive aircraft which
were dying to break even and its failed merger with Indian Airlines costed Air India huge amounts of loss.
• Increased competition from other airlines: After the implementation of LPG in 1991, other private
airlines captured their portion of the market share while Air India remained in the government’s hands. Air
India was unable to adapt to change which the new liberalized and globalized wanted, creating a void filled
by other private airlines.
• Financial losses amounting to hundreds of millions of dollars: A number of bad decisions by the
management made Air India a financial burden to the Government as Tax rupees were used to bail out the
organization. By March 2011, Air India had an operating loss of USD 2.8 Billion and a debt of USD 5.3
Billion.
 Major Turning Points & Interesting facts
about Air India
 Major turning points in Air India's history:
• Nationalization of the airline in 1953
• Formation of Air India Limited through the merger of multiple domestic airlines
• Failed Merger with Indian Airlines.
• Re-Privatizing the Airlines was pushed in 2017 and implemented in 2022
 Interesting facts about Air India:
• J.R.D is known as the father of Indian civil aviation Industry.
• In 1967, Air India had gifted an ashtray designed by world-famous artist, Salvador Dali to its first-class
flyers.
• Former Prime Minister of India, Rajiv Gandhi was a pilot in Air India before joining politics.
• Air India had operated the biggest evacuation drive in the history at the time of the Gulf War, bringing
home around 111,000 Indians from Iraq and Kuwait during the Gulf War.
 Leadership Styles
 Founder's Vision
• J.R.D. was determined to make Air India because it wasn’t just an airline to him. He saw Air India as a global
carrier of our nation’s image. He used to not every little detail for the airline to make the customer experience a
luxury travel.
 Motivation and Passion: J.R.D being a pioneer in the Indian Business world, is a motivating and inspiring icon
all of India. J.R.D used to have team meetings and motivate his employees on how to love their job passionately.
 Autocratic Leadership: J.R.D can be said as an Autocratic leader but he also gave lot of importance to his
employees. There’s a saying which goes like “Employees are the Maharaja and not the planes” meaning
employee satisfaction was high.
 Customer-Focused Approach
• J.R.D Tata being a perfectionist used to micro-manage and note every detail that is wrong and asks his
employees to rectify it. Once, J.R.D. cleaned the toilet of a flight himself.
 Strategic Partnerships: Air India’s partnerships with global airline brands like Lufthansa, Emirates and others
gave it a podium on the global stage.
 Government Influence: Air India’s major stakeholder was the Government of India which has been both
positive and negative for the company.
 Challenges Faced by Air India

 Financial challenges
 Intense Competition from low-cost carriers
 Employee Relations
 Operational Efficiency
 Government Regulations and Policies
 Infrastructure and Technology
 High-cost Fuel
 Covid-19 Pandemic
Business Standard https://www.business-standard.com
 Fly Air Indian

This Photo by Unknown Author is licensed under CC BY-NC-ND

 STRATEGIES TO OVERCOME
CHALLENGES
 Financial Restructuring:
 Enhance Operational Efficiency
 Employee Engagement and Training
 Infrastructure Development
 Government Support and Policy Reforms
 Customer Experience Enhancement
 Continuous Market Analysis and Innovation
 Competitive Pricing and Service
 SDG Goals
 Here are some basic topics and SDGs that airlines, especially Air India, frequently address in their sustainability
efforts:

 Climate Action (SDG 13): Airlines work to lessen their carbon footprint by putting into practice strategies including
buying fuel-efficient planes, streamlining flight paths, and utilizing sustainable aviation fuels (SAFs) where they are
available.

 Energy Efficiency and Renewable Energy (SDG 7): Airlines strive to improve energy efficiency throughout all
aspects of their business, including the offices, ground operations, and aircraft. In addition to lowering greenhouse
gas emissions, renewable energy sources like solar and wind power may be adopted.

 Trash Management and Circular Economy (SDG 12): Airlines should concentrate on in-flight and on-ground trash
reduction and recycling initiatives. This entails reducing single-use plastics, increasing recycling, and investigating.
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 Water Conservation (SDG 6): To lessen their influence on regional water resources,
airlines can put measures in place to cut back on water use, enhance water management
procedures, and guarantee adequate wastewater treatment.
 Airlines may aid in the conservation of biodiversity and ecosystems (SDG 15) by
collaborating with groups who are working in this area, reducing their influence on
delicate ecosystems, and advocating sustainable tourist methods.
 Community Engagement and Social Responsibility (SDG 1, 2, 3, 4, 5, 8): Airlines may
assist projects promoting gender equality, economic growth, poverty reduction,
education, and healthcare in their local communities. It's important to note that Air India
could have other sustainability activities and objectives beyond those that are currently
known to me. To remain informed about Air India's most recent environmental
initiatives
Rejuvenation strategy of Air India
Customer centric approach
Air India Emphasized on passenger experience and feedback to regain market share to be financially
strong .It focused on customer centric initiatives ,it included improving in flight services and updating the
in-flight entertainment

Digital transformation
Air India recognized the importance of investing in digital marketing .It consisted of easy and user
friendly mobile applications ,online booking systems and engagement of people through social media

Financial restructuring
To tackle with financial issues ,Indian government also contributed in restructuring plan of Air India .it
involved transferring of some amount in exploring privatization options .
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 Strategic Alliances and partnerships
Partnerships and alliances with other airlines was also a strategy used by Air India to expand its
global connectivity .Also ,collaboration with international companies allowed Air India to offer a
large range of seamless travel options to its customers .

 Operational efficiency Enhancements

Air India also made efforts to optimize the route network and eliminate the routes that were no more
profitable .Further ,engineering processes also assisted in improving overall efficiency and reduce
costs
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