revival of sick airline

7/31/2019 Revival of Sick Airline

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REVIVAL OF SICK AIRLINE

( AIRHIND AIRLINE )

PRESENTED BY:

T. VISHAL KIRAN, B-TECH

[email protected]


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CONTENTS

PAGE NO

1. Introduction 04

2. About AIRHIND 04

3. Main issues involved 06

3.1 Problems of plenty 06

3.2 Capacity expansion 06

3.3 Route structure 07

3.4 Code sharing 07

3.5 Aircraft fleet / junck old aircraft 08

3.6 Lack of leadership 08

3.7 Poor on time performance 08

3.7.1 Puntuality deserves to ranks high on the agenda

of AIRHIND 09

3.8 Competetive environment 10

3.9 Inadequate cashflow 10

4. Immediate remedial measures to prevent AIRHIND

from BANKRUPTCY 11

5. Evidence on the source of the AIRHIND losses 12

6. What can be done to improve AIRHIND financial performance 13

6.1 Get smart on fuel 14

6.2 Stop chasing market share 14

6.3 A new model for premium pricing 14

7. Ways to bail out AIRHIND from present crisis 14


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8. Recommendations 16

9. Three key lessons AIRHIND can learn 18

9.1 AIRHIND to create brand loyality, not simply satisfaction 18

9.2 Dont forget why youre here 18

9.3 Dont forget employee morale 19

10. Conclusions 19

Bibliography 20


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REVIVAL OF AIRHIND AIRLINE

1. INTRODUCTION

Indian aviation industry is on a foggy runway today, courtesy the global recession and

fluctuating oil prices, among other things. However, this crisis offers an opportunity to

restructure the sector in order to make it more sustainable. The restructuring process must

factor in key aspects: airline viability, the policy regime, long-term planning. The airline

industry exists in an intensely competitive market. In recent years, there has been an

industry-wide shakedown, which will have far reaching effects on the industry's trend

towards expanding domestic and international services. The airline industry has been hit

hard by rising prices, whether oil or leasing. Airlines vary from those with a single

airplane carrying mail or cargo, through full-service international airlines operating many

hundreds of airplanes. Airline services can be categorized as being intercontinental,

intracontinental or domestic and may be operated as scheduled services or charters.

2. ABOUT AIRHIND

The aviation industry in India, through Air Hind is a gleaming example of what the lack

of corporate governance can do to a business. Corporate governance is not about doing

well in good times, but about long-term sustainability of business through good times and

bad. This truth does not dawn upon us most of the time and we blame the stars and God

for our business failures. Since good governance results in long-term efficient use of

assets, improved factor productivity, better performance of enterprises and greater wealth

creation. Airlines the world over is a cyclical business. Profitability requires tight

management, discipline, efficiency, reasonably priced airport and fuel charges,

alternative airports and terminals, and well-run airports. Yet, in many years, losses areinevitable. Airlines are a poor business proposition, and more so in India. Air Hind

expanded rapidly over the last decade, but its flawed projections have been its undoing,

sending it spiraling into bankruptcy.


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Air Hind is on the verge of completing 69 years of its journey. Air Hind had been a

victim of circumstances and is badly in need of support. It is finding it difficult to retain

its market share in a now competitive (though restricted) atmosphere. In the `open sky

policy' era, since 1991, and consequent competition from other airlines its market share

has been slowly but surely dwindling. Opening up of the international skies to private

carriers, and lack of a proper manpower planning strategy, operating Uneconomical

routes, over-aged fleet, and bureaucratic meddling have contributed to Air Hind sorry

state of affairs.

Air Hind is in the news for the wrong reasons. After riding the crest of success and

profits, thanks to the economic boom and buoyancy the airline is now facing adverse

conditions and is in urgent need of focussed and innovative measures to bring it out of the

doldrums. The morale of the organization is at its lowest ebb replacing pride and dignity,

even though stepped in with revamping measures for the past five years such as

improving the image of the airlines with new planes, aesthetic dcor, new logo, re-design

of uniform, better in-flight service and rationalisation of routes and introduction of non-

stop flights. Air Hind which is said to be in a financial crisis showing a loss is also

facing trouble on other fronts including passenger load factor, which is around 60 per

cent. The passenger load factor points to the average number of passengers being carried

by an airline.

Strategy with a commitment for results from top to bottom is not only vital but also

necessary for the health of Air Hind . Airlines, which depend on passenger traffic, are in

dire need of a strategy built on the twin planks of cost-cutting and diversification, to meet

the challenges faced by them. Air Hind has been in the descent phase for the last few

years. Everything load factors, yield, performance, credibility, safety and the share

value of the airline is declining.

Though Air Hind enjoys world wide traffic rights the airline has been progressively

reducing its route networking, restoring to code sharing and other cooperative


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arrangements for the past few years it has been in the red loosing its image day by day.

Practically every airline in the country is in the red, as are many international airlines.

The 9/11 tragedy led to fall in traffic and revenues. As airlines started recovering, oil

prices skyrocketed. Airlines lost $10.4 billion in 2008, according to IATA. It estimated a

$9 billion loss in 2009.

Even as Air Hind trimmed costs to cope with sky-high fuel prices, demand fell following

the global financial crisis and recession. Corporates started cutting down on travel, and

the premium segment, which made the real money for airlines, was the worst affected.

There was a fall in holiday travel too. Declining demand brought down oil prices, but the

decline in travel neutralised it. The lowering of fares to attract passengers could only lead

to a dilution of the yield. The swine flu further threatens international air travel, and oil

prices may rise again.

3. MAIN ISSUES INVOLVED

3.1 PROBLEM OF PLENTY

Indian aviation additionally has been struggling with excess capacity and low fares for

the past 3-4 years. Low-fare airlines made long-distance air travel affordable, persuadingrail travellers to graduate to air, and volumes increased. When there was economic

growth, both within the country and internationally, travel demand increased but Indian

carriers, especially the national carriers, with their small fleet of aircraft, were unable to

match this demand.

3.2 CAPACITY EXPANSION

The capacity expansion in Air Hind in such a short period was not justified. It led to

massive competition amongst the airlines, which ended up chasing passengers and

offering huge fare discounts, leading to extremely low yields and losses even when the

flights were full. All of this happened at a time when costs, especially of fuel, were rising

steeply and the growing operations pushed up manpower costs.


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3.3 ROUTE STRUCTURE

The route structure has been the downfall of the giant Air Hind. However, they seldom

care about the profitability or otherwise of these routes. The Delhi-Raipur route, for

instance, uses jets when the load warrants only smaller turbo-prop aircraft. For

international routes, the ground reality is overlooked. Air Hind continues to operate with

sub-profitable loads to New York and Los Angeles. The major traffic from India is

mainly to the west coast, Silicon Valley, and smaller numbers travel to Seattle where

Microsoft is headquartered and Portland, Oregon where Intel is located.

Most of the traffic originates from the IT hubs of Bangalore, Hyderabad and Chennai. Air

Hind has not bothered to cash in on this route. For those flying from the South, Air Hindwith its poor connections and service, is the least preferred airline.

Look at the airlines which make a profit in these routes: Lufthansa, which has the fastest

connection between the South Indian cities and the west coast of the US; Singapore

Airlines, which has dominated premier travel out of India for years; and recently, Cathay,

which introduced flights on the Chennai-Hong Kong-San Francisco sector.

If Air Hind has to start improving its income to make good the huge losses, these are theroutes it should tap. Persisting with unprofitable routes is not going to see it through. The

airline must realise that leisure travel brings in but a small portion of its income. It needs

to target the regular business and white-collar passengers.

3.4 CODE SHARING

Code sharing is an important tool for airlines to minimise the costs of operating services.

By selling seats on a flight operated by another carrier, code sharing enables an airline to

make direct cost savings by rationalising services or establishing market presence on a

route without actually operating on it. Thus, both airlines may be able to save on fuel,

labour and other variable costs, as well as making more effective use of aircraft and other

overheads and Air Hind need to resort to much code sharing agreements.


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3.5 AGING FLEET / JUNK OLD AIRCRAFT

Most airlines of repute keep a young fleet and induct new aircraft periodically. Also, Air

Hind needs to rationalise the use of aircraft. Airlines worldwide have mothballed older,

fuel-guzzling aircraft. Years of delay in replacing aircraft kept passengers in dilapidated

craft while competitors offered the latest versions. It continues to operate older models

such as the Boeing 747-400, Airbus 310, A-300, A-320and B777 etc. Air Hind is running

with a very old fleet average age of aircraft is 10 years. Worldwide airlines try and

keep their age below six years. Jet is 4.5, Indigo wants to keep it 3.5.

It is much cheaper for the airline to ground these and go in for the modern, fuelefficient

aircraft. Even the original lot of A-320s, which are not as efficient as the newer models,need to be sold off. An option is to convert these older aircraft into freighters and the

airline can hive off its excess staff into the freight section or give them the option of a

golden handshake. A complete change in mindset is necessary.

3.6 LACK OF LEADERSHIP

Air Hind needs a head that can motivate the staff. There are a number of honest and

excellent professionals in the airline. Identify them and use their services, and dispensewith those who have bled the system all these years. Else Air Hind will soon find itself at

its journeys end. Air Hind requires maintenance, refinement and support to continue to

exist while some of these states may exhibit patterns that are very ordered, most of the

situations would be considered disordered. Today, Air Hind is in a state of complete

disorder. It is going through a war within. Some hard decisions are required and heads

may have to roll.

3.7 POOR ON-TIME PERFORMANCE

Major airlines suggest that there is a positive correlation between on-time performance

and operating profit. Despite the increasing attention that Air Hind paid to punctuality the

airlines on-time performance is still far below satisfactory levels. Punctuality is a key


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leadership challenge throughout the organization and should rank high on the

management agendafrom strategy and planning all the way to front-line operations

Punctuality differs widely between airlines. It has become a competitive differentiator,

both in positive and negative waysand customers do care strongly about it. Research

shows that major airlines with above average punctuality rates have been more profitable

than those with lower than average punctuality performance. The issue of Poor on-time

performance and its impact on the airline and particularly on Air Hind. Punctuality is one

of the key performance indicators in the airline industry and an important service

differentiator especially for valuable high-yield customers. In rising to this challenge

airlines need to take a strategic perspective and apply a comprehensive framework that

addresses the three main levels for punctuality improvement that are within their reach:

Network planning and control

Aircraft availability

Ground operations and departure process

3.7.1 PUNCTUALITY DESERVES TO RANK HIGH ON THE AGENDA OF

AIRHIND

Punctuality is not only a quality issueit reduces costs. Punctuality differentiates airlines from their competitors. Punctuality is a powerful performance indicator that drives total operational

excellence. When an airline runs a punctual operation with high service quality,

most other indicators are likely to be in the green. Not many industries have such

dominant indicators.

Punctuality is a tool for bridging functional boundaries, which will always be thereregardless of any organization model.

Managing the extended enterprise effectively requires the use of punctuality as akey indicator next to quality and cost in contractual agreements.


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Finally, punctuality is a leadership challenge. It requires all the skills we expectfrom advanced leaders: Motivate people, create followers, and decide on facts,

create understanding.

3.8 COMPETITIVE ENVIRONMENT

As noted, low-cost carriers have put increased pressure on Air Hind to reduce its fares

and their costs. This pressure has become intense as low-cost carriers have increased their

share of Air Hind airline traffic. Low-cost carriers competed on routes between

metropolitan areas that accounted for over 50 percent of the Air Hind domestic air travel.

And one study found that one low-cost airlinelowered fares on routes accounting for

more than 90 percent of domestic air travel. The eye of the storm lies in the faultybusiness models adopted by airlines that relied on pricing tickets below cost price to grab

market share. Despite the heavy discounts, airlines failed to achieve the seat occupancy

needed to break even. Though they call themselves low-cost carriers, they are actually

merely low-fare airlines. Airlines need to look for revenue models that are bottom line-

based rather than market share-driven. Even Jet Airways, a full-service airline, is

reportedly planning to charge for checked-in bags by weight. Unless airlines rethink their

business plans, rising fuel costs could hijack the huge gains made in air travel greater

affordability, improved connectivity and better seat availability in the past couple of

years.

A 13-week rolling cash flow planning process is needed to establish in Air Hind and

predict the available cash in the short term. This includes reviewing large 'cash outs', such

as heavy aircraft maintenance in the off-peak winter season, and restructuring costs, such

as severance payments.

3.9 INADEQUATE CASH FLOW

Assessing what capital expenditure can be delayed and paying extra attention to capital

structure are also critical. The maturity of debt should be extended to avoid repayments


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eating into cash needed for restructuring or investment. Covenants should be loosened

where possible. Payments to key suppliers should not be halted, however quite obviously,

aircrafts will be recovered by lessors if you default on payments, and aircrafts will be

impounded if airport charges are ignored. Delaying payment to fuel suppliers could result

in demands for cash in advance of receipt of the fuel, which would undermine careful

management of cash and sends a worrying message to the market and customers.

4. IMMEDIATE REMEDIAL MEASURES TO PREVENT AIR HIND FROM

BANKRUPTCY

FIRST, Air Hind need to bring its expenses down by rationalizing the size, quality and

mix of its fleet. With 60 aircraft, it has been able to manage a market share of less than 40per cent. Its fleet comprises AB-300/310/320s, B747-400 and B-777.

SECOND, the huge staff strength of 15000 employees in Air Hind requires serious

attention. It is not difficult to understand that Air Hind is grossly overstaffed. Work

continues even without these hangers-on. Air Hind currently has a fleet of 60 aircraft and

a staff strength of 15000 which gives it a staff to aircraft ratio of almost 250, almost

double of the globally accepted industry standards. The employeeaircraft ratio of the

airline is about 250:1, against the industry average of 200:1. For Jet Airways it is 173:1

and for American Airlines 128:1.

THIRD, Air Hind is plagued by the problem of higher expenses due to maintenance and

overhauling, the direct result of an aged fleet. Air Hind spent 26.9 cents per unit of

available revenue tonne km, whereas Jet Airways, SIA and Lufthansa spent 7.8 cents, 2.4

cents and 5.1 cents respectively. This indicates the crying need for employing newer

aircraft, which will help in not just cutting down the operating expenses, but also in

building a much needed positive image of the airline on safety ground.

FOURTH Yet another serious problem that Air Hind faces is the relatively higher

expenditure on fuel and oil. Jet fuel costs in India are 60-70 per cent higher than global

prices while taxes are as high as 35 per cent - the bulk of which is imposed by state


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governments. In Europe, fuel forms 30 per cent of operating costs but in India it's as high

as 50 per cent.

JET FUEL COSTS:

60-70% higher price than global prices Total government levies and taxes: 35% State governments alone charge 4-3 0% Jet fuel constitutes 33% of operating costs for European carriers Jet fuel constitutes 45-50% of operating costs for Indian carriers

In 2000-01 Air Hind spent under this head 17.4 cents per unit of available revenue tonne

km while for SIA, American and Lufthansa airlines it was only 5.6 cents, 5.8 cents, and

6.4 cents respectively. However, Air Hind has little control on this, as this high

expenditure is the result of high sales tax, duties, etc., on Aviation Turbine Fuel (ATF).

Some States have rationalised the sales tax on ATF.

FIFTH, Air Hind also suffers by serving certain low-density routes such as to the North-

East, Jammu and Kashmir, and Andaman Nicobar Islands.

5. EVIDENCE ON THE SOURCE OF THE AIR HIND LOSSES

Airlines the world over are a cyclical business. Profitability requires tight management,

discipline, efficiency, reasonably priced airport and fuel charges, alternative airports and

terminals, and well-run airports. Yet, in many years, losses are inevitable. An airline are a

poor business proposition, and more so in India until Air Hind combine routes, cut staff

dramatically, improves efficiencies, invest in regular training, inculcate customer

orientation and impose discipline.

An airlines profits depend on its revenue and its costs. Revenue depends on what a

carrier is able to charge for its flights and the number of passengers it carries. Costs


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depend on, among other factors, the price of fuel and the wages and salaries of

employees. What has happened to these components of profit during the past several

years to Air Hind? Apart from ongoing cost-saving initiatives, which many airlines have

adopted during the oil price peak this summer, revenue management is a priority.

Ancillary revenue streams can be exploited; charging for services such as excess

baggage, catering, additional legroom, priority boarding and seat allocation are popular

choices for airlines. However, many of these ancillary revenue measures are most

effective on short haul flights of up to four hours' duration.

Cutting back or eliminating unprofitable routes is one way to save money, but that course

of action is easier said than done.

A sensible restructuring strategy need to be followed by Air Hind is to trim back the

routes not making much money. That would involve cutting back people, canceling

leases on planes, and selling overseas routes.

6. WHAT CAN BE DONE TO IMPROVE AIRHIND FINANCIAL

PERFORMANCE

The challenges in Indian scene are many: rising ATF cost, internal competition, rivalry

with Indian railways in short haul markets, shortage of trained and skilled manpower,

increasing labor costs, infrastructural hurdles and deficiency of airports, airstrips etc.

"While fleets of other countries grew larger and stronger, Air Hind network shrank

because of aging aircraft and no new acquisitions. Even though Air Hind discounts its

fares more than rival airlines with older fleet and if its market share keeps dropping,

despite having a new fleet one reason could be poor on-time performance. In the last one

month, just 73 per cent of its international flights left /landed on time, compared to 85 per

cent for competitors like Singapore Airlines; on domestic routes, it was 42 per cent,

versus 68 per cent for Jet Airways .While airplanes are a very expensive asset that is not

easily replaced, they still can leave a remarkable impression on its passengers. Another

important tangible to consider would be leg room and seat. The configuration of the


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airplane can have a direct impact on the passengers comfort and their impression on the

airline. Cost control is a continuing process. These actions are like digging for water

when one's house is on fire and are grossly inadequate. Serious cost control should have

started years back -- by cutting staff strength almost by half from the bloated 15000+

figure, by eliminating populist policies in staff recruitment. Clearly, Air Hind needs a

complete change of direction. In the present viciously competitive environment, no

airline can survive with such built-in disadvantages.

6.1 GET SMART ON FUEL

Air Hind lock in prices on future fuel when the price drops. Small wonder Southwest is

one of the few success stories in the airline business.

6.2 STOP CHASING MARKET SHARE

Air Hind need to be savvier about capacity. Rather than scrambling to add seats in fear of

missing out on the party, airlines would do well to take a more cautious approach and

focus on efficiency and margins.

6.3 A NEW MODEL FOR PREMIUM PRICING

After all, people are willing to pay more if they believe they're getting more value. Air

Hind still offer certain advantages, especially to the business traveller including airport

lounges and more comfortable seating.

7. WAYS TO BAIL OUT AIRHIND FROM PRESENT CRISIS

There must be scientific power planning. 15000 employees for Air Hind appear tobe over staffed. At present, 15000 employee

s job description Must be studied by

expert groups.Too many employees and seat to employee ratio extremely high.

Multi-skilled training must be given to the employees of Air Hind. Set up laboratories to examine the profitability of various routes, with a focus on

yield. Get rid of a lot of routes that were bleeding cash and not contributing to the


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profit-and-loss statement. Within another six months or so get rid of most of the

ones that were unsalvageable. Air Hind has to maintain individual P&L statement

for each routeby day, by month, and by flight number.

Air Hind need to create & develop a new jobroute profitability manager thatdidnt exist in their structure. The person taking on the responsibility might not be

a regional manager; it could be a subordinate. But someone was now responsible

for profitability on that route.

Turn-around should be examined for individual plane. Unnecessary time lost onflight must be curbed to the minimum.

Activity chart of each plane must be maintained for maximum asset utilisation . The employees union should be involved to take the responsibility in management

actively.

Explore new routes to service international passengers. Years of delay in replacing aircraft kept passengers in dilapidated craft while

competitors offered the latest versions.

Air Hind to use innovative technologies such as the Internet to connect withcustomers and generate revenue is just one of many strategies for the airline to

confront difficult problems.

Air Hind has many different problems they have to solve at once ... including highlabor costs, varying seasonal demand, and vulnerability to weather conditions.

Focus on one unique service. "With the traditional business model, Air Hind hastried to be all things to all people." A better strategy is to pick a niche, such as

budget, regional business, or global travel--and be the best airline in that arena.

In their blind pursuit of market share, sometimes Air Hind has devoted resourcesto competition that hurts the industry. For example, lowering ticket prices to beat a

competitor--even when it means losing money--or continuing to fly an


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unprofitable route just to keep a competitor from gaining a foothold in that

territory hurts in the long run.

Air Hind need to Use technology to enhance customer relations. The industry canoffer travelers a Web interface customized to a specific type of travel. Whether

someone flies frequently, checks many pieces of luggage, or likes to enjoy certain

amenities such as an airport club lounge, the Web interface can direct the customer

to services that cost a little more, but offer desired benefits.

Air Hind need to distinguish themselves if they want to develop a brand identity.Pick the customers you want and go after themThrough technology.

8. RECOMMENDATIONS

A seven-member International Advisory Board is soon-to-be created. The Board isexpected to advice and give directions to Air Hind on international best

practices.

If aircraft are not used to their optimum capacity, the airlines should cancel allfuture deliveries.

The industry as a whole should be given relief by way of reduction in taxes andairport charges. It is one of the heavily taxed segments.

Our aviation regulators have their heads buried in sand, and refuse to embracemodern satellite navigation technology the performance based navigation

system for arrivals and departures. This will help save hundreds of crores of

rupees in fuel costs, and operations are assured throughout the year without

depending on ground-based aids. The world uses that and our neighbour, China,

has successfully embraced it.

Air Hind has to consider complete rationalisation of manpower and productivity-linked incentives, review of agreement on technical and operational matters,

return of leased aircraft, large scale redeployment of staff to curb in fructuous

expenditure.


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Hard decisions need to be taken in view of the challenging times being faced byAir Hind.

In reviewing the problems faced by Air Hind two major areas clearly stand out.First, they must learn to improve their customer service. Second, quality service

needs to be addressed and improved.

In general, when a customer pays an airline several hundred dollars or more for anairline ticket, they expect a certain level of service from the company. In fact, 84%

of customers base their airline of choice solely off of service quality. (Passenger

Poll Results).

A service firm like Air Hind may win by delivering consistently higher qualityservice than competitors and exceeding customer

s expectations. These

expectations are formed by their past experiences, word of mouth and

advertisement.

Serious cost control measures by Air Hind should have started years back -- bycutting staff strength almost by half from the bloated 15000+ figure, by

eliminating staff recruitment.

By selling some lucrative routes rights Air Hind can raise much-needed cash. Therights to fly these routes are negotiated with other countries the routes that are not

open to competition. Other airlines, including freight carriers may find these

routes attractive.

Explore new routes to service international passengers. Example Colombo toDubai or Manila to Dubai via Bombay? Considerable business is there.

Maximize usage of Gulf routes. Explore new routes to service internationalpassengers.

Make air travel relaxing, or at least more comfortable. The only reason some fly inbusiness or first class is the leg room and fully reclining seats. Comfort shouldn't

be limited to luxury travel.

A genuine smile goes a long way: Hire capable and friendly people for customerservice. If an employee is constantly surly, put him or her in a different position.


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Reduce labour costs-All major carriers need to win significant concessions fromtheir workers. Low labour outlays would consist of a mix of reduced wages, more

flexible workrules and trimmed benefits including pension.

Simplify flight operations -Low

-cost carriers use just a few types of aircraft, a

strategy that cuts training and maintenance expenses. Larger airlines like Air Hind

that fly internationally, to more remote destinations require varied fleets of large

and small planes. However, they can and should work toward streamlining the

types of planes they fly.

Offer more transparent pricing-Air Hind long had an exotic, almostincomprehensible pricing system. However, these days, with the Internet allowing

travellers to shop for the cheapest tickets easily, and low-cost airlines offeringuncomplicated set prices, traditional carriers have to follow suit or risk losing

more and more passengers.

9. THREE KEY LESSONS AIRHIND CAN LEARN

9.1 AIRHIND TO CREATE BRAND LOYALITY, NOT SIMPLY

SATISFACTION

Not only do loyal customers spend more, they are more likely to become brand

ambassadors and bring along other customers. People don't want to waste money on

brands that fail to meet their expectations. They're buying only what they trust and they'll

return to trusted brands repeatedly and Air Hind has to realize it.

9.2 DONT FORGET WHY YOURE HERE

To create real customer loyalty Air Hind has to offer more than just functionality and the

airline has to train everyone in its organization to have the pride to sell an emotional

connection, not just tools.


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9.3 DONT FORGET EMPLOYEE MORALE

Unhappy workers mean terrible customer service. Every company everywhere must have

an effective strategy for ensuring that its employees don't lose hope or happiness, just as

it must maintain its focus on creating brand loyalty.

10. CONCLUSION

Air Hind needs meaningful reform if it is to survive and grow. The lesson to learn by Air

Hind is that it is good to be aggressive but at the same time the businesses have to also

assess the risk and take sound business decisions. Air Hind must be run as a business,

with tough managers, on commercial lines, without too much flamboyance and

impulsiveness. Air Hind need to be Customer focused because he is the one who pays

for, uses, supports, or derives value from the systems you create.

The financial problem that the Air Hind is currently encountering is broadly associated

with long-term adjustment to airline industry. It is now clear that the airline industry has

needed and still needs time to adjust to its ridding itself of remaining cost inefficiencies,

doing a better job of matching capacity with demand, and anticipating and responding to

changes in traveler preferences. Both the market and enlightened public policy can

enhance industry financial viability

There is a case for rationalizing manpower cost, but the emphasis on this, to the exclusion

of the need to improve revenues and yield, is misplaced. May be there is a greater need to

target increased productivity. As in other sectors there should be also an effort to affect

savings in all sections of the operations and reduction in number of flights when the

occupancy is not to the optimum mark. Raising of fares should be the last choice.

Giving the customers what they want but at an affordable price is the modern mantra. On-

time performance, unmatched service, qualitative and well defined passenger safety

checks are of prime importance. Everyone should accept that airline competition is


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working in the sense that those carriers that enhance traveler welfare are rewarded with

higher profits. For Air Hind to survive let it operates a purely commercial venture, with a

level playing field. Air Hind as a pioneer in the airline industry in more ways than one, it

must able to demonstrate its commitment to customers and partners. To do that the airline

have to go beyond satisfaction to true loyalty. Air Hind has to provide a compelling

reason, beyond basic service and price, for consumers to choose you. You have to stand

out and win the hearts of your customers. Survival of the fittest theory of Darwin is

equally applicable to airlines today. Profitability is the only benchmark for survival

during these competitive times. "The words New Air Hind do have meaning when it is

ready to offer a product that can match any other airline,".

BIBLIOGRAPHY

WEBSITES

www.airdeccan.com

www.goair.com

www.kingfisher.com

www.wikipedia.com

www.google.com

www.spicejet.com

www.moneycontrol.com


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OTHER SOURSES

http://www.businessworldindia.com/jan1606/coverstory01.asp

India transportation infrastructure blueprint

The Skys The Limit, Indian Express

Discounted IA fares to take on no-frills Deccan Times of India

*******
http://www.businessworldindia.com/jan1606/coverstory01.asphttp://www.businessworldindia.com/jan1606/coverstory01.asp

revival of sick airline

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