presentation1 - my thoughts on air india recovery
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My thoughts on some ideas Air India can use on a recovery.TRANSCRIPT
Primer for Recovery Idea Air India
Madan Menon
Background There is a whole generation of Indians who have never flown on Air India
Was the biggest airline in India with over 60% market share – latest reports down to 5th position at 13.2%
Load factor only 78.1% compared to 89.4% of Indigo a LCC
Negative publicity – thus forcing passengers to choose other airlines
Highest rate of flight cancellations
Negative brand image
Objective of this primer Thoughts on improving the following:
Load factor Brand image Financial health
Way Forward Increased load factor needs to be done in conjunction with a marketing campaign to
improve brand efficiency
Bring back the Maharaja – the symbol of Air India
Consider bringing back Indian Airlines as a Brand
Indian Airlines – Domestic only (no near international destinations)
Air India – All international
Only separate brands – reporting structure remains the same as a single entity
“Indian Airlines – Fly India!”
Way Forward - Aircraft Leasing of Aircraft Out-
Air India to wet lease out Aircraft and Dry lease in New aircraft Reason- with an aging fleet – maintenance will be high and in turn high downtime.
With a newer leased fleet- lower maintenance costs and faster turn around times – prime examples of new LCCs
Retire old generation aircrafts and free cash tied with aircraft Have single supplier / single engine supplier – for interchangeability of staff, spares
and maintenance
Way Forward - Aircraft Short haul – Airbus A320 / 319 Medium haul – A330 / B757 Long haul – A340 / B777 Ultra Long haul – A380 (Del – LAX ) / Del - JFK
Create the regional sector airlines and use regional jets Ex: Embrarer RJ145 – regional jet – for sectors such as Mumbai Pune, Delhi
Gwalior, Itanagar – Imphal etc. Ideal work for shuttle services.
Way forwardMRO
More than 500 Airbus aircraft sold in India + Malaysia – available talent pool idea to setup Airbus MRO
Opportunity in maintenance given inherent expertise available
Low cost structure still in place.
Multiple MRO facilities in Tier 2 + Tier 3 cities for lower labor wages / parking fees and hanger charges
International Hub Strategic location of India can provide Asian hub for America based Airlines
to reach China, Singapore, Seoul etc
European stop over for aircrafts flying from far east to west Asia / eastern Europe.
Air India can provide ideal connectivity for these airlines
Way forwardFormation of new companies:
Formation of ground handling unit Can be used to outsource work from other airlines – make it a profit center and not cost center Formation of catering and aircraft cleaning service- non core business again – can be made as a profit
center rather than cost center – an ideal shared services model Spares and Aircraft leasing India pvt ltd
Keep MRO within organization- highly profitable as it is high quality work
Purchase of Pawan Hans – fits into strategic business model. Can offer seamless connectivity between any part of India
Creation of Air India Cargo Services – retrofit old aircraft to function as cargo aircraft. Allows for reuse of old aircraft and increase revenue streams
Way ForwardBudget Carrier
Make Indian Airlines the LCC arm of Air India – Eliminate food for flights of less than 2 hrs. Serve complementary soft drinks and snacks. Food for purchase only - Cost saving measure. Pass on cost savings to customers.
Why As it was mentioned in the first slide, there is a whole generation in this
country who have never flown on the erstwhile Indian Airlines – an Airline that pulls your heart strings and brings back fond memories.
Bringing back the Maharaja will be a resurgence of faith in the Indian story – one which shows that no matter what – we will survive and succeed
There is no dearth of talent – with some of the best flight crew and ground crew – Air India has all the ingredients to be the best and it is well on its way to do so
Thank you