COST AND BUDGET ANALYSIS OF THE

INDIAN AIRLINES

A REPORT SUBMITTED TO IIMT,

GREATER NOIDA

As a part fulfillment of full time

Post Graduate Diploma in Management

Submitted to: Submitted By:

Director (Academics) Devashish Srivastava
IIMT, Greater Noida. ENR NO. - 13032
Batch: 13th

Ishan Institute of Management and Technology

1A, Knowledge Park-1, Greater Noida, Distt.- G. B.Nagar (U.P.)
Website: www.ishanfamily.com, E-mail: ishan_corporate@yahoo.com
1
 PREFACE

As a student of management, apart from theoretical studies we need to

get a deeper insight into the practical aspects of those theories by working as
a part of organization during our summer training. Training is a period in
which a student can apply his theoretical knowledge in practical field.
Basically practical knowledge and theoretical knowledge have a very broad
difference. So this training has high importance as to know, how both the
aspects are applied together.
The study of management acquires most crucial position in the
business administration. In order to be successful, it is necessary to give
priority to the management in an organization. But it can’t be denied that
the study of management would be more educational, materialistic and even
more interesting, if it is to be paired with the work in organization as an
employee.
The training session helps to get details about the working process in
the organization. It has helped me to know about the organizational
management and discipline, which has its own importance. The training is
going to be a life long experience.
Management in India is heading towards a better profession as
compared to other professions. The demand for professional managers is
increasing day by day. To achieve profession competence, manager ought to
be fully occupied with theory and practical exposure of management. A
comprehensive understanding of the principle will increases their decision-
making ability and sharpens their tools for this purpose. During the
curriculum of management programmers a student has to attain a practical

2
exposure of an organization on live project in addition to his/her theoretical
studies.
This report is about the practical training done at “Indian airlines.”
New Delhi during the curriculum of PGDBM from IIMT, Greater Noida.

3
 CERTIFICATE

This is to certify that the project work done on “cost and budget analysis of
the Indian Airlines” submitted to Ishan Institute of Management and
Technology, Greater Noida by Devashish Srivastava in partial fulfillment of
the requirement for the award of degree of PG Diploma in management, is a
bonafide work carried out by him under my supervision and guidance .This
Work has not been submitted anywhere else for any other degree/diploma.
The original work was carried during 5th may 2008 to 5th July 2008.in
Indian Airlines.

Date seal/stamp of the organization Name of the guide

Address:

4
 ACKNOWLEDGEMENT

A project starts with an objective but it is accomplished only with enormous

efforts and tremendous support and guidance. It has been an utmost pleasure
for me to work with Indian Airlines. The cordial environment here has
always made me feel to be a part of the organization.

The process of completion of project report involves creation of debt towards

innumerable persons. For this I owe a deep sense of gratitude to Mr. A.
Jayachandran-G.M. Finance (Northern Region) IAL who allowed me to
pursue my training. I am grateful to Mr. Daleep Kumar (Deputy Manager
Finance) who gave me time from his busy schedule & under whose guidance
this project has been successfully completed.

5
 DECLARATION

I, Devashish Srivastava, student of PGDBM 2nd Semester in Ishan Institute

of Management & Technology, ENR. NO. – 13032, hereby declare that, this
Project Report under the title “Cost and Budget analysis of Indian Airlines”
is the record of my original work under the guidance of Mr. Daleep kumar,
Deputy Manager (Finance), Indian Airlines. This report has never been
submitted anywhere else for award of any degree or diploma.

Place : New Delhi

Date : DevashishSrivastava

6
TABLE OF CONTENT PAGE NO.

1 Executive Summary 08
2 Company Profile
(a) Name of company 09
(b) Head Office (with address) 09
(c) Branch Office (with address) 09
(d) Historical Background 09
(e) Vision and Mission Statement 20

3 Trade Policies 23
(a) Main Business 24
(b) Ancillary Business 26

4 Competitors 33
5 Promoters and Background 41
6 Vendors/Suppliers analysis 46
7 R&D Activities 58
8 Key Staff 61
(a) Managerial Hierarchy 65
(b) Duties and Responsibilities of Key Staff 66

9 HR Policies 68
10 Marketing Policies 82
11 Attractive Feature of the Company 88
12 Government Policies related to the Business 97
13 Job Profile and Assignment Profile 107
14 Finding and Limitation 143
15 Suggestions/Recommendation 169
16 Conclusion 175
17 Bibliography 176

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 EXECUTIVE SUMMARY
Whenever competition is feasible it is, for all its
imperfections, superior to

regulation as a means of serving the public interest.

— Alfred Kahn

AIRLINES around the world braced for slower growth, tighter earnings and

deeper cost-cutting as oil prices surged and the biggest carrier by revenue.
Indian Airlines have been constantly innovating and upgrading its fleet and
today is one of the largest domestic airlines in the world with the fleet of 74
(+43 in orders) aircrafts including A320s A300s and Boeing 737s.
Indian Airlines operates 260 flights everyday carrying more than 20,000
passengers on its network. It connects 63 domestic and 19 international
stations like Singapore, Kuala Lumpur, Bangkok, Katmandu, Kuwait,
Sharjah and Muscat etc.
The focus of our project is to study that as to INDIAN AIRLINE is the
oldest aviation industry of India then Why company goes in loss in the
past years….?? . By this we can give analyses where the company save
there cost and give more output to earn more profit.

Financial data of the companies was collected from Regional head officesof
company, the annual reports of the companies and through relevant websites.
For interpretation of data, various financial tools and techniques mainly cost
sheet and ratio analysis. On the basis of analysis and the interpretation of
the results obtain certain recommendations and conclusions have been
derived that can help Indian airlines to cut off there cost and to increase
there profit.

8
 COMPANY PROFILE

INDIAN AIRLINES

HEAD OFFICE:

Air India Building,

Nariman Point,
Mumbai - 400 021

REGISTERED OFFICE:
113, Gurudwara Rakabganj Road,
New Delhi – 110001

HISTORICAL BACKGROUND:

Indian Airlines came into being with the enactment of the Air Corporations
Act 1953 and was entrusted with the responsibility of providing air
transportation within the country as well as to the neighbouring countries.
Indian Airlines was given the task to assimilate various dimensions of the
eight private airlines, which were nationalized to provide well coordinated,
adequate, safe, efficient and economical air services. The airlines began its
operation on 1st August, 1953. At the time of nationalization, Indian
Airlines inherited a fleet of 99 aircraft consisting of various types of aircraft
which were gradually replaced by Viscount, F27 and HS748. Nineteen
hundred and sixty four (1964) was the beginning of the jet era in Indian
Airlines when the Caravelle aircraft was inducted into the fleet. Between

9
1970 and 1982 Indian Airlines started inducting first batch of wide bodied
Airbus A320 aircraft (19 aircraft) in June, 1989. Latest acquisition in IAL's
fleet, the Airbus A319, was inducted in December, 2005. Today, Indian
Airlines, together with its fully owned subsidiary Alliance Air, has a fleet of
70 aircraft (3 wide bodied airbus A300s, 47 fly-by-wire airbus A320s,
3Airbus A319s, 11 Boeing 737s, 2 Dornier Do-228 aircraft and 4 ATR-42.
IA has already placed order for 43 new aircraft ( i.e. 19 A319s, 4 A320s &
21 A321s ), and their induction in IAL is expected to commence w.e.f.
November, 2006.
Indian Airlines has been setting the standards for civil aviation in India
since its inception in 1953. It has many firsts to its credit, including
introduction of the wide bodied A300 aircraft on the domestic network, the
fly-by-wire A320, domestic shuttle service, walk in flights and easy fares. Its
unique logo emblazoned on the tails of all its aircraft has become
synonymous with service, efficiency and reliability. Air transport is the
most modern, the Quickest and the latest addition to the modes of transport.
Because of speed with which aero planes can fly, travel by air is becoming
increasingly popular. As far as the world trade is concerned it is still
dominated by sea Transport because air transport is very expensive and is
also unsuitable for Carrying heavy, bulky goods. However, transportation
of high value light Goods and Perishable goods are increasingly being done
by air transport.
In 1929, Neville Vincent, a former RAF pilot came to India from Britain,
Joined TATA Sons and made a survey of all possible air routes. He
presented the scheme to Director of TATA Sons. In Oct 1932 TATA Sons
Ltd, which later becomes Air India International commenced weekly airmail
services between Karachi and Madras via Allahabad and Mumbai.
10
Later two more airlines came -The Indian National Airways came into
existence in 1933 and Air Services of India into 1937. After the 2nd World
War, the Government of India announced a new policy for the Development
of Air Transport Services. In the first two years, it came into existence; the
Government gave license to 11 companies to operate air services in different
Regions.
At the time of independence there were 9 airlines operating with and beyond
the frontiers of the country carrying both air cargo and passengers. It was
reduced to 8 with Orient Airways shifting to Pakistan. These were:

• Airways India Ltd.

• Air Services India Ltd.
• Bharat Airways Ltd.
• Deccan Airways Ltd.
• Himalayan Aviation Ltd.
• Indian National Airways Ltd.
• Kalinga Airlines.
Taking into consideration to deteriorating financial position of the
conglomeration of private airlines, the Govt. nationalized the Airlines
Industry in 1953 through Air Corporation Act 1953.
Nationalization resulted in creation of two companies—Indian Airlines
Corporation (operating domestic services and short range International
services to adjacent countries) & Air India International (operate for
overseas services) & assets of all then existing companies transferred to
those companies. Foreign airlines carrying international passenger traffic to
and from India existed long before Independence. Their operations are

11
governed by bilateral agreements signed from time to time between the
Government of India and the governments of respective countries. In 1980-
81, the number of such airlines was 35.
The act prohibited any other than two companies to operate any schedule air
transport to or across India. The repeal of Air Corporation Act from 1st
March 1994 enabled private operators to provide air transport services.
Eight operators got the nod to commence operation out of which only two
have survived:

• Jet airways
• Sahara India

Aviation services in developed countries are categorized into three levels:

1. TRUNK ROUTES- Which connect major city pairs

2. REGIONAL AIR SERVICES - Which connect smaller towns, over
shorter distances with small aircraft
3. Non-Scheduled Services - Which include air taxi, charters, corporate
or private aviation

In India unfortunately the regional and non-scheduled or Tier 2 and Tier 3

services are almost non existent. Even though such services normally
constitute a small percentage of domestic air services, the importance of
such services should not be under-estimated, as general aviation forms the
entry point for personnel to enter the industry and gain grassroots
experience.
In 1953 a new dream took shape – to air link the vast South Asian
12
subcontinent by a single, modern and efficient airline. The airline was
Indian Airlines. Today, Indian Airlines, together with its fully owned
subsidiary Alliance Air, is one of the largest - 13 -regional Airlines system
in Asia with a fleet of 56 aircrafts, 8 wide bodied Airbus A300s, 34 Fly-by-
wire Airbus A320s, 11 Boeing 737s and 3 Dornier D-288 aircrafts.
Indian Airlines has been setting the standards for civil aviation in India since
its inception in 1953. It has many firsts to its credit, including introduction
of the wide bodied A300 aircraft on the domestic network, the fly-by-wire
A320, Domestic Shuttle Service and Walk-in-Flights. Its unique orange and
white logo emblazoned on the tails of all its aircrafts is perhaps the most
widely recognized Indian brand symbol that, over the years has become
synonymous with services, efficiency and reliability.

Indian Airlines have been constantly innovating and upgrading its fleet and
today is one of the largest domestic airlines in the world with the fleet of 55
aircrafts including A320s A300s and Boeing 737s. Indian Airlines operates
220 flights everyday carrying more than 22,000 passengers on its network. It
connects 63 domestic and 19 international stations like Singapore, Kuala
Lumpur, Bangkok, Katmandu, Kuwait, Sharjah and Muscat etc.

The airlines have grown from strength to strength by keeping an excellent

track record of manpower and infrastructure development. Its
internationally recognized pilots training academy, the Central Training
Establishment (CTE) ay Hyderabad is totally self-sufficient in training
pilots, engineers, cabin crew and other personnel. In addition to this Indian
Airlines is self sufficient in aircraft maintenance’s to keep its aircraft in top
flying condition.

13
Before 1953, i.e. before these airlines merged to from Indian Airlines there
was no set of rules and standards of operations of the airlines. The
operations mainly were competition oriented and the result of which was
that every airlines wanted to be the cheapest one. Thus, all most all the
airlines did not have enough money to maintain the aircraft’s. They
presented an excellent example of unhealthy competition. Ultimately the
Govt. took over by passing the Air Corporation Act and Indian Airlines
come into being. The Board of Director’s conducts the affairs of the
corporations.

Indian Airlines is one of the public sector corporations in India. A statutory

corporation like Indian Airlines is formed with definite objectives in the
interest of the public tough based on pre-set principles.

The objective functions of Indian Airlines are as follows:

1-It shall be the function of the corporation to provide safe, efficient,

adequate, economical and property co-ordinate air transport services whether
Domestic or International or both.

2-Corporation shall so exercise their power as to secure that air transport

services are developed to the best advantage and in particular so exercise
their power as to secure that the services are provided at reasonable charges.

The opening up of the skies in 1992-93 thrust Indian Airlines into a new
environment of competition and gave rise to greater expectations of the
passengers. Indian Airlines has faced the competition with aplomb, catering
to enhanced passengers needs with various product upgrades and marketing
initiatives. And at the same time, it has continued to fulfill its social
obligations. The airlines have augmented its fleet of aircraft by leasing 5

14
Boeing 737 and 2 A-320 aircraft. Plans are also underway to purchase new
aircraft and thereby strive to establish itself as a technology and market
driven organization.

Indian Airlines operates a complement of 58 aircraft: 30 A-320s, 11 A-300s,

11 Boeing-737 and 3 Dornier-0228s.

Mumbai is the major maintenance base for A-300 aircraft Avionics (Aviation
Electronics) shops at ATEC (Automatic Test Equipment Complex) take care
of repair and certification of all computers on board. Accessories overhaul
division meets the needs of wheels, brakes and hydraulic is known does a
complete overhaul of A-300 engine, only detail parts are sent abroad for
repair.

Delhi is the major maintenance base for A-320 and Boeing-737 aircraft. The
“A” checks for A-320 is carried out primarily in Hyderabad and if need
arises also in Delhi. “C” checks, 5 years and 9 years are carried in Delhi too.

Boeing-737 4C/7C checks are carried out in Delhi. Delhi and Kolkata both
have facility to carryout ‘A’, ‘B’ and ‘C” checks on Boeing-737 aircraft but
this job is primarily carried out at Kolkata. Well equipped Avionics overhaul
shops at Delhi aid in-house repair to majority of A320 and Boeing-737
components.

Jet engines overhaul centers a multi-millionaire dollar enterprise undertakes

repairs to both V2500 AI engines of A-320 as well as JT8D-9A & JT8D-17A
engines of Boeing-737 aircrafts. Engines are dismantled. Parts replaced and
state of art test house. Only some modules and blades are sent abroad for
refurbishment.

15
A full-fledge APU repair center at Kolkata takes the entire work of APU’s
from all three aircrafts. Six major stations namely Delhi, Mumbai, Kolkata,
Hyderabad, Chennai and Bangalore also extended night halt facilities for all
three types of Jet aircrafts.

Indian Airlines is a Public utility under the Industrial Dispute Act 1947, has
to work in the interest of public. In the view of this, the corporation is
accountable to public through the government and parliament for its
activities. The control is two-fold:

(a) To see that corporation does not deviate from its objectives.

(b)To have financial control because the funds of the corporation are
derived from public funds.

Indian Airlines is presently fully owned by the Government of India and has
total staff strength of around 19300 employees including that of Alliance
Air. Its annual turnover, together with that of its subsidiary Alliance Air, is
well over Rs.6000 crores (around US$ 1.4 billion).

LOGO –

16
While creating a logo the team considered several options- the national flag,
birds, animals and colors. Before zeroing it on the wheel from the structure
at Konark at Orissa which signifies motion and represents the image
perfectly.
It has changed its name Indian as Indian is such a generic name. It
represents 100 crore people, their emotions, their movies everything.The
wheel in the Konark temple, it was an inspiration for the new logo is a 12ft
large bulky monolithic structure.

NETWORK

The Indian airlines ltd. Covers 60 domestic stations and 17 international

Stations out of which 16 are online and 1 is offline (Lahore). The Indian
Airlines ltd. International network covers Kuwait, Oman, UAE, Qatar,
Bahrain, west Asia and Pakistan, Nepal, Bangladesh, Myanmar, Srilanka
and Maldives in south Asia sub continent.
The Airlines' network spans from Kuwait in the west to Singapore in the
East and covers 76 destinations - 58 within India and 18 abroad. The Indian
Airlines international network covers Kuwait, Oman, UAE, Qatar and
Bahrain in West Asia; Thailand, Singapore, Malaysia and Myanmar in South
East Asia and Pakistan, Afghanistan, Nepal, Bangladesh, Sri Lanka and
Maldives in the South Asia sub-continent.

INDIAN AIRLINES, one of largest domestic airlines company, has its

Headquarters in New Delhi with its four regional offices in New Delhi,

17
Kolkata, Mumbai, Chennai and fifth office in Hyderabad Reforming to
regional Headquarter in Chennai and having Regional office in New Delhi

LOOKING BENEATH STRUCTURE

IAL becoming Indian is such big news that the coverage it generated left all
paid advertising in the dust. As a logo and name change is just a part of the

18
story more important is the overall image of the airline. The new look has to
be seen into visible part of the airline- from the tickets, the counter, the color
of the floor inside the aircraft, to the uniforms and the standard of service.
Indian is now merged with other government airline Air India forming a new
company NACIL (National Aviation Company of India Limited). NACIL
has now two sub parts i.e. NACIL-I and NACIL-AI. The brand name of the
company is AIR INDIA.

VISION AND MISSION

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 1. To meet the demand for reliable, economic and efficient transport

The main vision and missions to be pursued by the Company as contained

inthe Memorandum of the Association are as follows :

1. To succeed to the undertaking of Indian Airlines (a Corporation

established by the Air Corporations Act,1953), including all property, rights,

reserves, liabilities and obligations of Indian Airlines both inside and outside
India, which are to be vested in the Company by virtue of any legislation
3. To buy, sell, manufacture, recondition, repair, alter, improve, manipulate,
repealing the Air Corporations Act, 1953 or otherwise restructuring the Air
prepare for market, let and take on hire, and generally deal in all kinds of
Corporations established under the said Act.
aircraft and other apparatus of every description capable of being flown or
2. In any part of the world to carry on business as an airline and air transport
navigated in the air whether powered or not and plant, machinery, apparatus,
undertaking and to provide air transport services and carry out all other forms
tools, utensils, materials, produce, substances, articles and things.
of aerial work, whether on charter terms or otherwise, and to carry on any
4. To render and provide whether by itself or in association with other
other trade or business or do anything which is calculated to facilitate or is
carriers all services and facilities as are necessary or desirable for the
auxiliary to or associated with such business including to carry on any
operation of air transport services in any part of the world including but not
business now or formerly carried on by Indian Airlines.
limited to maintenance, servicing and repairing of machinery and equipment,
and ramp handling operations, communication, security, cleaning and
facilitation, passenger and cargo handling and storage services and training
of personnel, technical or otherwise.

5. To buy, sell or otherwise deal in manufacture, own, repair, maintain

service, garage, and store, vehicles(whether commercial or otherwise and
whether mechanically propelled or not) machinery, tools, apparatus,
equipment requisite for or ancillary to the operations, maintenance repairs
and servicing of aircraft as also for the maintenance of repairs and servicing
such vehicles and machinery, implements, equipment, components, apparatus
and to deal in lubricants fuels and all other things capable of being used with
such aircraft, vehicle, machinery and equipment. 20

The main mission of the company is as follows:

2. Service through high standards of service customers and passengers.

3. To maximize the essential and strategic communication within India

in times of national emergencies and to be reliable second line of
defence.
4. To increase passenger satisfaction by improving passenger/cargo and
ameneties.
5. To enhance the contribution of national economy during the 5 year

plan period by securing the reasonable return on capital consistent

with the social objectives.
6. To foster international tourism to India and to improve balance of

Payments.

7. To stimulate domestic tourism and tourism internal trade by air in

order to develop air mindedness and broaden the Indian market.
8. To share in the promotion of the social, cultural and emotional
integration of india and to participate in the process redressing
regional imbalances.
9. To encourage self expression and participate in the activities of the
company by all employees and to encourage their legitimate
aspirations for growth and self development.

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 TRADE POLICIES

Trade refers to sale, transfer or exchange of goods and services. It helps in

making the goods produced available to the ultimate consumers or users.
These days’ goods are produced on a large scale and it is difficult for the
producers to themselves reach individual buyers for sale of their products.
Businessmen are engaged in trading activities as middlemen to make the
goods available to consumers in different markets. In the absence of trade, it
would not be possible to undertake production activities on a large scale.

Trade may be classified into two broad categories:

1. Internal Trade

2. External Trade

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Internal trade or home trade is concerned with the buying and selling of
goods and services within the geographical boundaries of a country. This
may further be divided into wholesale trade and retail trade. When goods
are purchased and sold in bulk, it is known as wholesale trade. When goods
are purchased and sold in relatively smaller quantities, it is known as retail
trade.

External trade or foreign trade consists of the exchange of goods and

services between persons or organizations operating in two or more
countries. If goods are purchased from another country, it is called import
trade. If they are sold to another country it is called export trade.

Now to augment or facilitate the trading activities there are some other
activities which are known as auxiliaries to trade. These activities are
generally, referred to as services because these are in the nature of
facilitating the activities of industry and trade. In fact, these activities not
only support trade but also industry and hence, the entire business activity.
These activities help in removing various impediments which arise in
connection with the production and distribution of goods and services. The
auxiliaries to trade include activities such as transport, banking,
warehousing, insurance and advertising.

Transport facilitates the movement of goods from one place to another.

Banking provides financial assistance to the trader. Insurance covers various
kinds of risks and warehousing creates time utility with storage facility.
Advertising provides information. In other words these activities facilitate
movement, storage, financing, risk coverage, and sales promotion of goods.

Keeping in view the above concepts of trade and auxiliaries to trade NACIL
(I) has formulated its own trade policy.
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MAIN BUSINESS
Being an aviation company the main business of NACIL (I) is the airline
business. The aviation industry was set up by J.R.D Tata in 1932 when he
founded the Tata Airlines which later came to be known as Air India. The
erstwhile Indian Airlines was set up in the year 1953 as a result of merger of
about eight private airlines. The Indian Airlines was formed with enactment
of Air Corporations Act and entrusted with the responsibility of providing air
transportation within the country as well as to the neighboring countries.
NACIL (I) began its operation on 1 august 1953 with a fleet of 99 aircrafts
consisting of various types of aircrafts. With the advent of the jet age in
1964 the erstwhile Indian Airlines introduced the Carville aircraft into its
fleet. Between 1970 and 1982 the company started inducting first batch of
wide bodied A320 aircrafts. Latest acquisition is the erstwhile Indian
Airline’s fleet is the Airbus A319. Today NACIL (I) has a fleet of 70
aircrafts and has placed order for 43 new aircrafts.

Indian Airlines has been setting standards since its inception in 1953 and has
been a pioneer in the aviation industry. It has many firsts to its credit
including the introduction of the wide bodied A300 aircraft on the domestic
network, the fly by wire A320, walk in flights and easy fares.

In the modern era to attract the passengers the airline is offering various
lucrative schemes to the passengers and has also added various on board
facilities.

24
The various lucrative schemes include super saver scheme, corporate super
saver, spot fares, bid & fly etc. NACIL (I) also offers a flying return
program to the individual members above the age of 12 years. Apart from
these schemes passengers are provided facilities such as tele check in, city
check in, dial a ticket etc.

The network of erstwhile Indian Airlines spans from Kuwait in the west to
Singapore in the east and covers 76 destinations -58 within India and 18
abroad. The network covers Kuwait, Oman, UAE, Qatar, in west Asia,
Thailand, Singapore, Malaysia, and Myanmar, south East Asia and Pakistan,
Sri Lanka and Maldives in south Asia sub continent.

There have been some recent additions in the network of NACIL (I). The
erstwhile Indian Airlines now flies to more destinations then it used to in the
past years. NACIL (I) has launched six times weekly Delhi Patna service
with A320/B737 aircrafts.

Also the erstwhile Indian Airlines has put the diamond city of Surat in
Gujarat on the air map of India with the introduction of a daily direct flight
from Delhi to Surat.

Some international sectors have also been added to the network of NACIL
(I). The airline has also launched services to Melbourne via Singapore.

NACIL (I) is all set to present a younger face of its cabin crew in order to
attract more and more passengers. The company’s Board of Directors

has approved a scheme to permit “not so young cabin crew to voluntarily opt
for retirement or ground duties”. The scheme titled as Voluntary
Rehabilitation Scheme claims it would help the company improve the
passenger perception of the airline in keeping with the demands of a

25
competitive market. Under this scheme cabin crew who are over the age of
41 years will have the option of leaving the company, if they wish with a
compensation package depending on their age.

NACIL (I) flight operations centre around its four main hubs i.e. Delhi,
Kolkata, Mumbai, and Chennai and carry about 7.5 million passengers
annually on its network.

The erstwhile Indian Airlines has done a commendable job since its
inception. As a result of which the airline was awarded the best domestic
airline by CNBC channel recently.

ANCILLARY BUSINESS
Besides the main and the most significant business of NACIL (I) i.e. airline
business the company is also engaged in some ancillary business. The
ancillary business of the company includes the following activities:

1. Cargo

2. Engineering and maintenance

CARGO

The cargo business of the company deals with the transportation of goods
from one place to another. The cargo business is of immense utility to the
company as it generates a significant amount of revenue for the company.
Since the inception of the airline in 1953 the erstwhile Indian Airlines has
prided itself in its ability to transport just about anything across the length
and breadth of the country. At NACIL (I) it is made sure that the cargo gets

26
the care it deserves and reaches its destination on time- safe and sound The
Company is capable of delivering tonnes of cargo to any place on its
network as it has the largest cargo capacity amongst the domestic carriers.
The NACIL (I) cargo covers 63 destinations in India and 17 destinations
abroad. The airline has a 7-8 per cent of the air cargo market in the country.
With its mixed fleet NACIL (I) has a distinct edge over the competitors in
the Indian domestic competitors. A300 aircraft is a cargo friendly aircraft
and is capable of carrying big and odd sized cargo n unitized mode with
pallets and containers besides carrying cars. The major commodities being
airlifted by the airline are garments, machinery, components, dyes,
chemicals and perishables such as fruits, vegetables, flowers, fish and meat.
With the boom in the Indian economy NACIL (I) has responded by
operating its own dedicated freighter services between India and Europe.
For this purpose two A310s have been converted to freighters. The cargo
wing of NACIL (I) known as Air India cargo, in association with India Post,
launched a dedicated freighter service for the north-east. The new service to
the north-east will enable efficient carriage of mail, parcel and logistics
across the north-east. The airline is also planning to convert five of their
Boeing 737s into freighter aircrafts. It has also decided to use Nagpur
airport as hub to offer express and retail courier services.

To add to its current services NACIL (I) also has entered into a strategic
alliance with Emery Worldwide for transporting cargo between Singapore
and India. According to the agreement NACIL (I) would bring cargo for
Emery from Singapore to Chennai and fly it to Bangalore, Delhi, Mumbai
and Kolkata and will guarantee space on five of its Singapore-Chennai

27
flights. As a cargo service provider NACIL (I) extends the following
services to its clients:

1. DOOR-TO-DOOR:

NACIL (I) cargo offers domestic door-to-door services to service sensitive

customers. These services are just a phone call away.

2. AIRPORT-TO-AIRPORT:

For time sensitive shippers, express cargo facility with guaranteed delivery
within 24 hours is also available.

3. COURIER ON BOARD:

Couriers can avail special courier on board schemes on select domestic

flights along with special market rates. Courier bags are delivered on
conveyor belts immediately on arrival.

4. WAREHOUSING:

NACIL (I) ensures that the safe and timely dispatch of cargo. To store
perishable items such as medicines, fruits, vegetables etc. the airline has cold
storage facilities where such commodities can be stored.

NACIL (I)’s cargo activity has been awarded the ISO 9002 quality
accreditation by the Registrar of Accreditation Board of the United States.
This certification will enable the company’s cargo division to compete more
emphatically with the international airlines for the inbound shipping of high
value cargo, especially from major hubs like Singapore and Bangkok.

28
The airline’s cargo strength lies in the large network, available infrastructure,
experienced manpower, and a commitment for better service over the
competitors.

The airline has taken several measures, including quality monitoring

systems, root cause analysis of complaints, and improving infrastructure to
provide better services. In keeping pace with the global phenomenon of e-
commerce, the airline’s cargo is seeking value additions to support a
qualitative logistics chain.

ENGINEERING AND MAINTENANCE

Traditionally, engineering and maintenance has been viewed as a support

function of a business. Managing equipment performance has not been a top
priority until the recent years. The inadequacies of engineering and
maintenance in the past have adversely affected the organizational
competitiveness. Therefore, in the recent years more emphasis has been
attached to such activities as the various airlines have to maintain a large
fleet of aircrafts.

NACIL (I) has also developed its own full fledged engineering and
maintenance wing which has well qualified aircraft maintenance engineers.
The airline has its main business attached to the aircrafts therefore it
becomes necessary that the airline looks after its aircrafts in the best possible
manner. For this NACIL (I) has signed a tripartite agreement, leading to the
formation of the proposed joint venture maintenance repair overhaul (MRO).
The other signatories are Airbus and Bangalore based Jupiter Aviation &
Logistics. As per the agreement, this MRO venture would begin its
activities in Delhi with two A320 hangars. A third hangar would come up in
due course. The facility would cater to major maintenance of ATR and A320
29
aircraft in India. Phase II expansion would cater to wide bodied and other
aircraft types. In third year, the venture would have facilities to cater to over
200 single and wide body aircraft for various customers from India and
abroad.

The erstwhile Indian Airlines has also signed a memorandum of

understanding to establish a joint venture for CFM56 engines. The facility
will perform full spectrum of services, from engine disassembly to piece
parts and in house component repairs for CFM56-5B and CFM56-7B
engines.

NACIL (I) ensures that its aircraft maintenance engineers are skilled and are
aware of the latest technical know how, it imparts various training programs
to its engineers. These programs ensure that the engineers stand in good
stead and are capable of maintaining a large fleet of sophisticated aircrafts.
There are four training schools set up at four different cities in India i.e.
Delhi, Mumbai, Kolkata and Hyderabad. There are in all 21 instructors
catering to the training needs of all the engineers. The airlines have around
700 engineers and 3000 technicians all over India.

There are separate training programs for technicians and engineers.

TECHNICIAN COURSE

1. Basic Aviation Course

2. Aircraft Familiarization course

3. Aircraft course

4. Airframe and Engine course (A&C course)

5. Electric Instrument and Radio course

30
All the above mentioned training programs are held at all the four bases

For local technicians i.e. Delhi, Mumbai, Kolkata, Hyderabad.

As per the new guidelines issued by Directorate General of Civil Aviation

(DGCA) there should be human factor training for all the technicians.

ENGINEER COURSES

1. Airframe and Engine course (A&C course)

2. Avionics course

3. Avionics Difference course

4. Electric Instrument and Radio course

All the above training is done at all the four training bases.

Also there is general refresher course for the engineers. This course is a pre
requisite for the engineers to get their license renewed.

The general refresher course is also done at all the four bases. The engineers
are taught about the human factor. The course includes the following topics:

(I) Patience

(ii) Honesty

(iii) Motivation

(iv) Stress management

(v) Humility

(vi) Maintenance Error Decision Aid philosophy developed by Boeing

Company.

(vii) Latest development in aviation

31
(viii) Safety in aviation

(ix) Quality control manual

The training programs for the engineers and technicians should be as per the
latest requirement of the industry. The engineering and maintenance
activities are of immense importance as the whole business of the airlines
depends upon the condition of the fleet of aircrafts and in order to get the
optimum results the aircraft should be in their top flying condition. The
engineers and technicians in NACIL (I) are highly qualified and are very
much capable of maintaining the fleet of 136 aircrafts of the airline. The
airline has also maintained a Jet Shop at the avionics complex in which the
jet engines are looked after. The NACIL (I) also provides engineering and
maintenance facilities to other airlines also.

COMPETITORS

Since time immemorial man has constantly evolved the various modes of
Transport for e.g. rail, sea and air transport. Out of these modes of transport
Air transport is the fastest mode of transport. In the current scenario, when
Indian economy is booming aviation sector is also thriving. Now days with
Rise in disposable income of the people and paucity of time, people want to
Reach their destination by a cheaper and fastest mode of transport i.e. air
transport.
At the time of attaining freedom, there were many private airlines operating
their services in India. Through an Act of Parliament ie. Air Corporations
32
Act 1953 government amalgamated all the private airlines existing at that
point of time. With the enactment of Air Corporations Act 1953, all the
private were merged and two new airlines were created. One was Air India
and other was Indian Airlines. Air India was given the responsibility of
Operating flights to foreign countries whereas Indian Airlines was entrusted
With the task of operating flights mainly on the domestic sector.
For a long time Air India and Indian Airlines had monopoly in the aviation
Sector. But with the introduction of the New Economic Policy in 1991 and
the advent of the Open Sky Policy by the government many private airlines
were given license to operate air services to transport passengers and cargo.
As a result of which many private airlines like Jet Airways, Sahara Airlines,
Air Deccan, Kingfisher etc. have entered the aviation sector. These private
Airlines provide better facilities to passengers and at the same time they give
a stiff competition to state owned carrier Air India
The opening up of the skies has created new market opportunities for civil
Aviation business in India. Prior to coming up of the private carriers,
passengers had no option except to travel by Indian Airlines or Air India.
But with entry of the private operators the scenario has changed
tremendously. Now the passengers have many options. In case, he does not
get seat in a particular airline he can opt for other airline.
Five decades ago when Air India and Indian Airlines were set up the
competition at the national as well as international level were almost non
existent. It was easier for government monopolies like Air India and Indian
Airlines to operate as good, efficient and profitable airlines. However, with
the scientific advances in the aviation industry and entrance of many
Commercial airlines in the aviation industry the competition has intensified.
Many airlines around the world have closed down because of their inability
33
to face the competition.
Until recently two private airlines - Jet Airways and Air Sahara offered
competition to the national carrier but in the last few years a large number of
Private airlines such as Air Deccan, Kingfisher, and Spice jet, Go Air,
Paramount, Indigo has entered the domestic market. These private airlines
have brought revolution in the air travel with regard to fare and tariff, better
Facilities to the passengers, convenient flight connections etc. to the
Passengers. With coming up of these airlines in the fray all the airlines
including Air India are experiencing cut throat competition.
With the air travel becoming cheaper and popular option, the civil aviation
Sector is experiencing a fast growth. During 2006-07 total passenger traffic
grew by 27.2% while the cargo traffic grew by 11.2%. The aircraft
Movement grew by 27.5% during the year. Still the aviation sector has
tremendous potential to further grow.
With coming up of private airlines as a result of government policy there is a
intense competition in Indian sky. Many private airlines like Jet Airways,
Air Deccan, Spice jet etc. have reduced the air fares so that they can lure
more and more passengers and increase their volumes. Most of the private
airlines are operating their flights on profitable sectors. As a result they are
earning handsome revenue. As regards the Air India being a state owned
carrier it has the social commitments also. Air India operates its flights not
only on the profitable sectors but also as a national commitment it operates
on the uneconomical routes like Leh, North Eastern States. In case of
natural calamities in any part of the country/abroad as a social commitment
Air India has operated its flights irrespective of profits to rescue the people
affected by the natural calamity.
As per the latest reports of market share in terms of number of passengers
34
carried Jet Airways is the leading player in market followed by Kingfisher,
Air Deccan, and Air India. From the market share it is seen that Jet Airways
is leader in the domestic market whereas Air India which once upon a time
had a monopoly has slipped to number four position. From this it is evident
that the private airlines have been providing better services, on time
performance etc. to the passengers.
There are some low cost carriers in the Indian aviation sector which have
been offering low fares to the passengers. It because of this low fares most
of the passengers are attracted towards the private airlines. These airlines
have been successful in weaning away the passengers from the full fare
carriers like Air India. Earlier only the well off people used to travel by air
but because of these low cost carriers now a common man can also realize
his dream of travelling by air. The private airlines have not only snatched
passengers but also reduced profit margin of Air India.
With the competition intensifying in the Indian skies state owned Indian
Airlines in 2005 decided to redesign its brand to tackle the competition and
attract more and more passengers. Indian Airlines decided to shed its age
old brand age old brand and logo for a new name – “INDIAN” and logo
inspired by Konark Sun temple in Orissa. It also invited fashion designers to
suggest new crew uniforms to give its staff a more trendy look.
The new brand name and logo adopted by erstwhile Indian Airlines in 2005
is given here under:

35
Since the competition is intense, most of the airlines in the world have gone
for restructuring and partial disinvestment. For instance Thai Airways
which compares to erstwhile Air India was an unknown identity 25 years
ago.
Today it is one of the best and well managed international airlines. When it
was a wholly owned government enterprise, it was going into losses, and
now as a limited company, with some percentage of shares still owned by
the Thai government, Thai Airways is a profitable company. So is the case
with other international air carriers like Singapore Airlines, KLM of Holland
etc. In India, though the disinvestment commission had recommended
disinvestments in two airlines, and the government also made up its mind to
do so, yet it has not been able to muster political courage to disinvest in
these airlines. The Kelkar committee had also made certain
recommendations for the restructuring in the airlines, one basic question
needs to be answered.
Since most of the airlines the world over are constantly trying to cut their
operational costs through merger and other ways Government of India also
decided for merging Air India and Indian Airlines into one national airline to
cater to national and international air travel. Government was also of the
view that there is no rationale of having two commercial airlines i.e.
erstwhile Air India and Indian Airlines with two separate managements,
other support facilities and two separate staff cadres. As a single entity by
merging these two state owned airlines it would be reaping benefits of the
economies of scale.
Accordingly to face the challenges from domestic private airlines and
international airlines Government of India on 1 march 2007 approved the
merger of Air India and Indian Airlines. Consequent to the above a new
36
company viz. National Aviation Company Of India Limited was
incorporated under the Companies Act 1956on 30 March 2007 with its
registered office at Airlines House, 113 Gurudwara Rakabganj Road, New
Delhi. The certificate to commence business was obtained on 14 May 2007.
On 27 August 2007 Registrar of Companies under Companies Act 1956
registered the new company i.e. National Aviation Company of India
Limited.
The brand name of the new company is “Air India” and “Maharaja” has
been retained as its mascot. The logo of the merged entity is a red coloured
flying swan with the “Konark Chakra” in orange placed inside it. The logo
has been morphed from Air India’s characteristic logo “The Centaur”
whereas the “Konark Chakra” was reminiscent of Indian’s (erstwhile Indian
Airlines) logo.
The corporate office of NACIL is at Mumbai. The brand name Air India
and its logo of the new entity are as follows:

The merged entity operates on the domestic as well as international sectors.

The new entity has skilled manpower, efficient engineering department,
other support facilities, fuel efficient aircrafts etc. which will help Air India
to tackle the stiff competition in the aviation sector at domestic as well as
international level. After the creation of new company as a result of merger

37
the NACIL will be able to reduce operational costs, avoiding duplication,
route rationalization etc. and to face the competition in the market. The
combined skilled manpower of NACIL are being utilized gainfully to tackle
the competition.
Now after the merger new company has a fleet of 112 aircraft and will be
among the top 10 airlines in Asia and among the leading 30 airlines globally.
As a result of its fleet acquisition programme of 111 aircraft, the new airline
will induct 21 new aircraft including seven Boeing 777s, 10 A-320s,and 4
Boeing 777-800 shortly.
The private airlines like Kingfisher, Jet Airways etc. are providing attractive
fares and other facilities on the ground and in the air to attract the
passengers.
They are also maintaining on time performance so that passengers can reach
their destination well on time. These private airlines also provide tele check-
in, through check in, e-ticketing etc. facilities to the passengers.
Likewise Air India is also not lagging behind in attracting passengers by
offering competitive fares, better services on the ground and in the air,
prompt and courteous staff. To take the competition head on Air India has
acquired some aircraft which are fitted with in flight entertainment and
modern comforts. For instance the new aircraft have personal television
system with each seat, information system which constantly show the speed
of the aircraft, the height at which it is flying, the temperature outside the
aircraft as well as the maps of the route as it flies.
Jet Airways has been given permission to operate to foreign countries –US,
Singapore, Gulf countries and they are successfully operating to these
countries because Jet Airways has been offering competitive air fares, better

38
connectivity,convenient flight timings. Similarly Air India is also
competing
not only with the Indian private carriers but also with the international
airlines. Air India has improved its product, better services in the air and on
the ground, competitive fares etc. to tackle the competition. Air India has
recently launched various new connections on the domestic as well as
International sectors. To save the valuable time of passengers it has started
its direct flight to New York from Delhi and Mumbai. Jet Airways which is
already operating to New York is also facing stiff competition from Air
India.
From the foregoing it can be concluded that due to Open Sky Policy of
Government of India many private airlines have been given permission to
operate air services in India. These airlines have one side generated
competition among the airlines and on the other hand passengers have been
benefitted because of this competition. Now the passengers have various
options of selecting the airlines keeping in view the fare structure, flight
timings and other factors. Government should encourage the healthy
competition in the aviation sector so that not only passengers are benefitted
but also our economy develops because civil aviation forms a very important
infrastructure segment in boosting trade and commerce at the national and
global level. If the airlines want to survive in this intense competition they
have to constantly strive hard to make their services passenger friendly.

39
 PROMOTERS

With the passage of years human being is being involved in more activities
than what he used to do in the yesteryears. As a result the time at the
disposal of human being has been reduced and in the coming years it will
reduce further. In such a scenario when people are so busy the transport
system has to be lightning quick so as to enable the people to travel from
one place to another in no time. So the airline industry is the remedy to all
the transport worries of the modern human being. The aviation industry in
India was initiated by our legendary and visionary entrepreneur J.R.D Tata
in 1932.
It was Jamshedji Tata who started the aviation industry in India with the
setting up of Air India Limited in 1932. In other words the Air India
Limited was promoted by Tata Group and initially it was a private company

40
Tata Group being the whole sole owner. It was a landmark in the Indian
aviation history.
When India attained independence in the year 1947 the government decided
to own and promote the aviation business in the country. Consequently, with
the enactment of the Air Corporations Act 1953 the government
amalgamated all the private airlines promoted by the Tata Group and formed
two new airlines i.e. Air India and erstwhile Indian Airlines and the
Government of India itself became the promoter of the two airlines.
Air India was entrusted with the responsibility of operating their services to
foreign countries whereas erstwhile Indian Airlines was given the task to
assimilate various dimensions of the eight private airlines, which were
nationalized to provide well coordinated, adequate, safe, efficient and
economical air services. The airline began its operation on 1st August 1953.
At the time of nationalization NACIL (I) inherited a fleet of 99 aircrafts
consisting of various types of aircraft, which were gradually replaced by
Viscount, F27 and HS748. In the year 1964 the Government of India i.e.
promoters of the company decided to induct Caravelle aircraft into the fleet.
Between 1970 and 1982 the government decided to induct the first batch of
wide bodied aircrafts i.e. A320 aircrafts. The latest acquisition in the fleet of
NACIL (I) is the Airbus 319 in the year 2005.
NACIL (I) has been setting standard for civil aviation in India since its
inception in 1953. The promoters of the airline have taken many steps to
make the airline a world class. NACIL (I) has many firsts to its credit
including the introduction of the wide bodied A300s on the domestic
network, fly by wire A320s, domestic shuttle service, walk in flights and
easy fares and this has only been possible due to the visionary promoters of

41
the airline. The unique logo of NACIL (I) emblazoned on the tails of all the
aircrafts has become synonymous with the service, efficiency and reliability.
In the face of increasing domestic competition the promoters i.e. the
government has decided to undergo the restructuring of the organization,
management and finance with a view to issuing an initial public offering.
The promoters at first changed the name of the company to ‘INDIAN’ and
then eventually merged Indian with Air India with the brand name as Air
India. The new logo i.e. flying swan with the wheel of the Sun temple in
Konark symbolizes the continuous progress in the industry.
Air transport industry being a public utility service ought to be developed in
the national interest. Ever since NACIL (I) has been innovating and
upgrading its fleet to emerge as a proud symbol of modern India.

NACIL (I) enjoys a monopoly on virtual routes. It also has the benefits of
low wage costs international standards. So the airing skies, NACIL (I) today
is one of the largest domestic airline in the world with a fleet of all jet
aircrafts i.e. Boeing 737, Airbus 300 etc. including 17 international stations
spanning the Middle East, South Asia and South East Asia. The airlines
network spans from Kuwait in the west to Singapore in the east and covers
75 destinations, 59 in India and 16 abroad.
The promoters of the company also have allowed the company to carry a
sizeable amount of cargo and mail to earn revenue from its services and it
also earns a considerable amount of foreign exchange. In the last four
decades, NACIL (I) has grown from strength by keeping an excellent track
record of manpower and infrastructural development. Also the promoters of
the airline have made the airline self sufficient with well equipped
maintenance facilities to keep its aircrafts in flying shape without disrupting
42
schedules. As a result the airline is able to operate 220 flights daily
providing services to remotest parts of the country while achieving an
invariable 80% seat load factor.
Recently, a subsidiary company by the name of Alliance Air has been started
by the government to cater to the needs of shorter routes. It is the
government that allows NACIL (I) to operate in the remotest areas such as
Assam, Meghalaya and other north eastern states, Port Blair etc. NACIL (I)
operates with a motive of social welfare instead of profit maximization. It
operates to serve the majority of the people in spite of the fact that the
service will result in not much revenue.
The promoters of the airline have done a wonderful job for the country as
the airline has a workplace of around 21000 employees and provides
employment to over 2 lakh people indirectly. It is a matter of pride that in
the last four decades NACIL (I) has financed its expansion through funds
generated internally. Some of the highlights of this period are as under:

1. Increase in passenger carriage from 0.5 million in 1954-55 to 8 million in

2006-07.
2. Spread of network from 23000 kilometers to 1,18,000 kilometers.
3. Growth of assets from 210 crores to 3200 crores.
4. A manifold increase in system seat capacity from 3070 seats per day to
37000 seats per day.
The promoters in 1994 decided to make the erstwhile Indian Airlines as a
public limited company with a view to overview all problems and to turn
around the organization a strategy was formulated and put into action.
The elements of this strategy as decided by the government are as under:

43
1. HRD initiative
2. Increased utilization of aircraft
3. Creation of profit centers

The promoters of NACIL (I) i.e. Government of India have taken significant
steps to transform the company into a profit making organization. The first
step was to acquire the company from the private promoters and then merge
the two airlines into a single entity to counter the competition. The two
airlines have performed brilliantly in last four decades before they were
merged together. The government has formulated many apt policies for the
efficient functioning of the airline.
Therefore, to conclude it can be said that the promoters have done a great
job and aided the national carrier i.e. NACIL (I) to touch new heights. If the
government keeps promoting the airline in the similar way then the day is
not far off when NACIL (I) will truly justify its mission statement “ To
become a world class airline and to provide finest services in the areas we
operate”.

44
 VENDOR ANALYSIS

With the advent of the New Economic Policy in the year 1991 many private
players have forayed into the various sectors of the Indian economy.
Consequently, the competition in the various sectors nowadays is sky high.
Therefore, the organizations have to be on their toes to counter this stiff
competition. The organizations are trying their level best to edge out their
competitors and gain a competitive edge over them. They are exploiting
their core competencies to the fullest possible extent so that they can have a
distinctive competence in this scenario of cut throat competition.
The buzzword in today’s epoch is customer satisfaction. The organizations
can only succeed if they have a strong customer base and they are duly
satisfied. Customer satisfaction can only be there if the company provides
the goods and services at the right time, at the right place, in the right

45
quantity and at the right price. The supply of goods and services can be
regularly maintained if the company has an excellent supply chain and is
able to procure the raw materials at the right time and in enough quantity. If
it is a manufacturing company the raw materials play a significant part in the
smooth functioning of the company. On the other hand if it is a non
manufacturing company then it has to procure various finished products
from these manufacturing companies to ensure proper functioning of the
business. In other words the finished products of manufacturing companies
become the raw material for the non manufacturing company.
The raw materials also form a important part of the cost of the product as the
manufacturer adds the cost of raw material in the final price of the product.
Therefore, proper control over the material is necessary from the time the
orders are placed with the vendors till they are actually consumed in plant
and office operation, or have been sold as merchandise. An efficient system
of materials control will lead to a significant reduction in the production
cost. When the costs are down the price will also be low as a result there
will be a high level of satisfaction among the consumers.
Control over materials is also necessary to assure a steady supply of each
item of material. In the absence of quantity on hand information regarding
each item, there is a constant danger of material being stored in too small
quantity which may result in a heavy loss consequent upon stopping of the
whole assembly line, or in too large quantity resulting in serious
obsolescence losses.

MATERIALS CONTROL

46
Materials control is the systematic control over the procurement, storage and
usage of material so as to maintain an even flow of materials and avoiding at
the same time excessive investment in inventories. Thus, material control
involves efficient functioning of the following operations:

1. Purchasing of Raw Material

2. Receiving of Material
3. Inspection of Material
4. Storage of Material
5. Issuing of Material
6. Maintenance of Inventory Records
7. Stock Audit

Irrespective of the nature of the company the management of the company

has to maintain the following levels of stock:

1. Maximum Level

The maximum level is the largest quantity of a particular material which

should be kept in the store at any one time. The fixation of maximum level
is necessary to avoid unnecessary blocking up of capital in inventories,
losses on account of deterioration and obsolescence of materials, extra
overhead and temptations to thefts. The maximum level should be decided
after taking into consideration the following points:

(i) Storage space

47
(ii) Availability of working capital
(iii) Seasoned Consideration
(iv) Rate of consumption
(v) Rules framed by the Government
(vi) Cost of storage, interest on capital invested in stock.

2. Minimum Level

The minimum level is the lowest quantitative balance of material which

must be maintained in hand at all times so that the assembly line mat not
stopped on account of non availability of materials. It should be decided
taking into account the following factors:

(i) Average rate of consumption of materials.

(ii) Average time required to obtain delivery of fresh supplies
(iii) Re order level

3. Re Order Level

It is the point at which if the material in store reaches, further supplies must
be ordered. The re order level is fixed somewhere between the maximum
level and minimum level in such a way that the quantity of materials
represented by the difference between the reordering level and the minimum
level will be sufficient to meet the demands of production till such time as
the order materializes and supplies are received.

Re order level depends on two factors:

48
(i) Maximum consumption
(ii) Lead time i.e. the anticipated time lag between the dates of issuing orders
and the receipt of materials.

4. Danger Level

It is the level of stock below which the material stock should never be
allowed to fall in normal circumstances. It is slightly less than the minimum
level, and at such a point the Purchase Manager should make special efforts
to acquire required materials and stores.
In some concerns danger level is fixed above the minimum level but below
the re order level. In case the order has been placed for materials on
reaching the re order level, the only significance of such a level is to check
up with the Purchase Department that materials will be received in time.
Thus fixation of danger level below the minimum level is meant for taking
corrective action, while its fixation above the minimum level is an indicator
for preventive action.

5. Economic Order Quantity (E.O.Q)

Economic Order Quantity refers to size of the order which gives maximum
economy in purchasing any material. It is also referred as optimum or
standard ordering quantity. It is fixed mainly after taking into account the
following costs:

(i) Ordering Costs

49
(ii) Stock Out Cost
(iii) Inventory Carrying Cost

The first two costs may be referred as the costs of acquiring while the last as
the cost of holding inventory. The cost of acquiring decreases while the cost
of holding increases with every increase in the quantity of purchase lot.

NACIL (I) being a service providing organization has to procure many

finished goods of the manufacturing concerns which is utilized as raw
materials by NACIL (I). The vendors of NACIL (I) are well established in
their respective industries and are pioneers in their field of business. NACIL
(I) has about 250 vendors of which some are mentioned below:

1. Exide Industries Limited

Exide Industries Ltd. And its subsidiaries manufacture lead acid batteries
primarily in India. It manufactures lead acid automotive and motorcycle
batteries. The company also manufactures industrial batteries such as
flooded type lead acid batteries and sealed maintenance free VRLA type
batteries for power, telecommunication, infrastructure, projects and
computer industries. In addition it offers traction battery chargers and
conventional battery charger for energy and industrial sectors. The company
was founded in 1916 and was formerly known as Chloride Industries
Limited and changed its name to Exide Industries in 1995. The company
has its base in Kolkata, India.
The company supplies batteries to NACIL (I) to be used in the various
vehicles, aircrafts and in the offices as well.
50
2. ITE Engineers Limited

ITE Engineers Limited is a company is a manufacturing company engaged

in the manufacturing of grade casters, wheels, conveyors, rollers and
material handling equipments. The company has been in the business for the
past two decades and has gained experience as well as mastery to
manufacture a gamut of products known for their quality, efficiency and
precision.
ITE Engineers Limited supplies various kinds of conveyor belts which are
installed at the airports for collecting the baggage on the airport. It also
supplies equipments which are utilized for transporting materials efficiently
from one place to another.
3. Raja Fabricators

Raja Fabricators is a company engaged in the manufacture of aluminum

doors, windows, glazing, partitions and fabrications. The company has been
in the business since the last two decades.
The company supplies aluminum products such as doors, window frames,
fabrications, cargo containers to NACIL (I).

4. Zenith Birla Limited

The company together with its subsidiaries manufactures and sells welded
pipes and high speed steel cutting tools in India. It offers and sells black and
galvanized welded steel pipes and electric resistance welded pipes for use in
water and gas pipeline structural pipes, conveyor idlers, bore well casting,
51
precision tubes. The company offers its products in square, rectangular and
circular hollow sections to replace conventional sections such beams, angles
and channels. It exports its products to the United States, Europe and the
Middle East. The company was incorporated in 1960 as Zenith Steel Pipes
and changed its name to Zenith Steel Pipes and Industries Limited in 1986
and Zenith Birla Limited in 2005.
The company supplies drillers, cutters and other engineering sophisticated
equipments to NACIL (I) which are being used in the engineering
department for aircraft maintenance.

5. Shalimar Paints Limited

Shalimar Paints Limited is one of the leading paints manufacturing
companies of India. It has three manufacturing units and more than 54
branches and depots across the country. The company has a wide range of
product in both architectural and industrial sectors. The architectural
coatings cover both interior and exterior sectors. The Jindal Group and the
Jhunjhunwala Group are the promoters of the company.
The company provides paints of all kinds to NACIL (I) for use in its office
and hangars. Paints are also used to paint the aircrafts.

6. Perfetti Van Malle

Perfetti Van Malle is one of the largest manufacturers of confectionery and

chewing gum products in the world. It leads the Indian sugar confectionery
market with more than 25 per cent of the value share of the market. It also
takes care of the development of South Asian market and exports to Asian

52
countries. In the last twelve years, the company’s portfolio has grown from
a single brand to having 15 brands today.
This company supplies confectionery to NACIL (I) to be served in the
aircrafts to the passengers.

7. R.S Hygiene Private Limited

R.S Hygiene Limited is a leading manufacturer of tissue paper and tissue

paper products, household aluminum foils, cling films, wet tissues and semi
rigid containers. The company exports to Middle East and Europe. The
company was established in the year 1993.
This company is responsible for supplying tissue paper and wet tissue to
NACIL (I) which to be used in aircrafts to be given to the passengers.

8. Tata Coffee Limited

Tata Coffee Limited engages in production and sale of coffee and related
products. The company also owns and operates coffee estates located in
Hasan and Chickmaglur districts of Tamil Nadu. It offers pure filter coffee,
mixed filter and roast and ground coffee under various brands. In addition
company produces various products such as pepper and cardamon, engages
in curing operations of coffee, trades in various items required for coffee
plantations, as well as offers estate supplies and markets branded tea as
‘Coorg Tea’. Tata Coffee manufacture plywood and block boards from its
timber resources. The company is based in Bangalore and is a subsidiary of
Tata Tea Limited.

53
The sole responsibility of the company is to supply coffee powder to the
airlines to be served to the passengers in aircraft in J class.

9. Ganpati Knitters Limited

The company is the pioneer in business of supplying cloth to the various
industries. It has been in this business since the last decade. The
responsibility of the company is to provide cheese cloth to the airline.

10. Metfoil Technika Limited

Metfoil Technika is engaged in the business of manufacturing foil rolls for
wrapping up of the food and food products. The company supplies foil
paper and rolls for packing of the food products in the aircraft which is
provided to the passengers.

11. G.C Beverages

G.C Beverages is a leading manufacturer of mineral water in India. It
manufactures mineral water under the brand name ‘natural spring’ and
distributes it all over the country.
The company supplies mineral water to NACIL (I) to be used in offices,
canteens and aircrafts.

12. Nestle India Limited

Nestle India Limited is one of the leading manufacturers of confectionery

and coffee in India. The company manufactures chocolate and coffee
powder and supplies it to a wide number of consumers.
54
The company supplies coffee powder to the airline to be served to the
passengers in the J class.

13. Mafatlal Industries Limited

Mafatlal Industries Limited is engaged in the manufacturing of clothes.
They do not produce readymade garments instead they produce running
lengths which can be stitched according to requirements. Their clothes are
world famous and they don’t compromise on quality.
Mafatlal Industries Limited is responsible for supplying cloth piece to the
airline which is provided to the employees for their uniforms. Also the
company supplies table cover, napkins etc.

13. INOX Air Products Limited

This company supplies dry and liquid nitrogen to the airline which is used in
aircrafts for maintaining the hydraulic system.

14. S.R Foils Limited

S.R Foils Limited is engaged in manufacturing paper napkins and tissue
papers. The responsibility of this company is to provide paper napkins and
tissue papers.

15. Surya Roshni Limited

Surya Roshni Limited has established itself as the manufacturer of lighting
equipments such as bulbs, tube lights, CFLs etc. The company has been in
the business for a long time and is a pioneer in the lighting industry. The
major responsibility of this company is to supply bulbs, tube lights and other
lighting equipments which are used in offices and aircrafts.
55
The above are some of the major suppliers of the airline. Some of the other
suppliers are mentioned below:
(i) Basant Tools Limited
(ii) Sky Industries Limited
(iii) Golden Tyres Limited
(iv) Gupta Plastic Industries
(v) Project Engineering Traders
(vi) R.K Industries
(vii) National Refrigeration Company
(viii) Sheetla Polymers
(ix) Blue Sky Systems
(x) Capital Cables India Limited
(xi) Crompton Greaves Limited
(xii) Prestige Paper Products
(xiii) S. Balaji Mech Tech Private Limited
The operations of NACIL (I) are spread all across the globe. Therefore, such
a huge organization is bound to have a large number of suppliers. The
departments in need of some material send their requirements to the
STORES DEPARTMENT which in turn forward the request to the supplier
concerned. The supplier in turn analyses the order and delivers the material
to the airline in stipulated time. On receiving, the material is inspected by
personnel of the Stores department as well as the personnel of the
department placing the order. On finding it satisfactory both the personnel
approve the delivery and the goods are taken for further utilization by the
respective department.
On the contrary if the goods are found not up to the mark then they are
notified to the superior and the other person concerned. They are brought
56
into the notice of the vendor supplying the goods. Then an appropriate
action is taken regarding the goods.

RESEARCH & DEVELOPMENT ACTIVITIES

The two state owned airlines Air India and Indian Airlines have merged into
a new company called the National Aviation Company of India Limited
(NACIL), operating under the brand name Air India. The merged entity,
benefits the passengers considerably by providing an integrated international
and domestic footprint, ensuring seamless integration of flights and allowing
international flights from any domestic point in India and vice versa for the
incoming sectors. This has been possible due to the constant development
activities that have taken place in the company over the past years such as
fleet expansion, introducing new flights etc. From time to time various

57
research and development activities take place which are aimed to make the
company better and competitive.
The year 1953 has been a historical year for the Indian civil aviation industry
because of the fact that the erstwhile Indian Airlines and Air India came into
being in this year due to enactment of the Air Corporations Act. The first
international flight of Air India from Mumbai to London via Cairo and
Geneva took a little over 24 hours and had to make two stops before
reaching London. But in the modern epoch one can travel from any part of
the globe to another without a halt. This has only been made possible due to
the developments that have that taken place in the recent past. Air India’s
non stop flight to New York from Delhi and Mumbai is a testimony to the
fact that travelling by air has now become a comfortable proposition and
also it has become time saving.
Apart from the above development Air India can boast of a series of other
developments can have taken place or going to take place in the near future.
The company has a fleet strength of 136 aircrafts and 392 flights a day. Its
worldwide network consists of 120 destinations spanning 39 countries which
was not there when Air India came into being in the year 1953.
As a part of its fleet acquisition programme, Air India has placed order for
111 aircrafts – 68 from Boeing and 43 from Airbus, of which 20 have
already been inducted in the fleet. All these state of the aircraft will be
equipped with the latest passenger amenities. The induction of Boeing 777-
200LR aircraft technologically the most advanced aircraft in the world
today, saw the launch of the non stop flights between Delhi and New York.
Air India has launched its services to the Gulf countries with the induction
of
the aircrafts such as Boeing 737-800s and Airbus 330s. Flights are now
58
being operated from more points in India enabling the passengers to avail
the services from airports closer to their city of residence and resulting in
better connections and greater convenience. Air India also has introduced its
direct flights to Shanghai from Chennai. With the Indian economy booming
and exports thriving, Air India is responding by operating its own dedicated
freighter services between India and Europe. Air India cargo in association
with India Post launched a dedicated freighter service for the North East.
Air India Express, the budget airline of Air India, has grown from strength to
strength. It connects 12 cities in the Gulf, Sri Lanka and the South East with
13 Indian destinations. Air India Express at present operates 46 services a
week from 12 Indian cities to Dubai alone.
Also keeping in view the fog situations in winters the airline has made
special arrangements including deployment of spare aircrafts at four metro
airports- Delhi, Mumbai, Kolkatta, Chennai. The staff strength is also being
augmented for the fog related activities.
It has been around five decades since the airline was incepted. Since then the
airline has performed exceedingly well in all its operating areas. It has kept
pace with changing scenario through the above development activities. The
airline in these five decades not only glorified its image but also brought
laurels for the country. It was Air India that put India on international
aviation map.

59
 KEY STAFF

For any production to be carried out the following five factors of production
are very much necessary:
1. Land
2. Labour
3. Capital
4. Raw material
5. Entrepreneur
Among the above five factors of production the labour factor i.e. the human

60
resource is the most significant. The significance of human resource lies in
the fact that it is the human resource which can be imparted skills, trained
and motivated in order to achieve some predetermined goals. This cannot be
done with machines, land etc. They are tuned to perform some specified
monotonous functions while on the human resource can perform a plethora
of functions.
The term human resource can also be explained in the sense that it is a
resource like any other natural resource. It does not mean that the
management can get and use the skill, knowledge, ability etc. through the
development of skills, tapping and utilizing them again and again. Human
resource is also regarded as the human factor, human asset, human capital
and the like.
In NACIL (I) a great importance has been attached to human resource i.e.
the employees of the organization. Therefore, the company has a well
defined organizational set up and duties and responsibilities of each
individual are clearly laid down. The company consists of a chairman and
11 members on the board of directors appointed by the government. The
company is a statutory body under the Ministry of Civil Aviation,
thoroughly independent to maintain its day to day business.
The government has the power to issue directives to it from time to time the
accounts of the company are audited by the controllers and auditor general
and then placed by the controller before houses of parliament together with
appropriate audit reports. NACIL (I) has its corporate office at Mumbai and
registered office at New Delhi and for administration convenience it is
divided into four regions – Northern, Southern, Western and Eastern and
each region is headed by a executive director.
The chief executive of the company is chairman and managing director who
61
is positioned at the corporate office which is located in Mumbai.
The key personnel in NACIL (I) are those who are holding an important
designation in the organization. These personnel also constitute the top
management of the company and are responsible for taking decisions which
are of strategic importance to the organization.
The key personnel along with their duties and responsibilities are
Enumerated as under:
Board of Directors:
(1) Shri Raghu Menon Chairman and Managing Director
(2) Shri Anup Srivastava Director (Personnel)
(3) Shri Amod Sharma SBU Head – Related Business
(4) Mrs. Anita Khurana Director (Commercial) and
SBU Head Cargo
(5) Shri K.M. Unni SBU Head – MRO (Airframe)
(6) Shri V.K. Sharma SBU Head – MRO (Eng. & Comp.)
(7) Shri S. Chandrasekhar Director (Finance)
(8) Shri N. Vaghul, Non-Official Director
Chairman ICICI
(9) Shri R.K. Singh Government Director
Joint Secretary,
M/o Civil Aviation

1. Mr. Raghu Menon (Chairman and managing director)

He is the person holding the topmost position in the company having his
office at the headquarters in Mumbai. He is responsible for overlooking all
the activities of the organization. He overlooks the work of all the
departments and is responsible for taking strategic decisions.
62
2. Ms. Sushma Chawla (Deputy managing director)
Ms. Sushma Chawla is the deputy managing director of NACIL (I). She is
responsible for the matters relating to ministry and parliamentary questions
and liaison coordination on consultative committee. She is also responsible
for standing committee, hindi committee, facilities and properties
maintenance, and legal administration of the company.

3. Mr. Anup Kumar Srivastava (Director, Personnel Department)

Mr. Anup Srivastava is the director of the personnel department of NACIL
(I). He is responsible for overlooking matters relating to the development
and effective utilization of the human resource of the company and plays a
key role in formulation of the human resource development policies and
strategies and their implementation.

4. Mrs. Anita Khurana (Director, Commercial Department)

She is responsible for the day to day planning and execution of cargo
operations. She also overlooks the marketing and delivery of inventory of
the seats produced on the network.

5. Mr. K.M Unni (SBU head – MRO)

Mr. K.M Unni is the head of MRO( Airframe) with the responsibility for
day to day planning and execution of MRO operations.

6. Mr. Vipin Sharma (SBU Head – MRO engine & components)

He is also responsible for day to day planning and execution of MRO
63
operations.

7. Mr. S. Chandrasekhar (Director Finance)

He is the director of the finance department of NACIL (I). He is
responsible for all the financial matters relating to the company.

REGIONS

1. Mr. D.S Kohli (Executive Director, Northern Region)

He is the executive director of the northern region. He has the
responsibility of overlooking the whole northern region. The northern
comprises of stations such as Delhi, Lucknow, Jaipur etc.

2. Mr. E.A Varghese (Executive Director, Southern Region)

He is the executive director of the southern region and is responsible for
the overall supervision of the southern region. The southern region
comprises of stations as Chennai, Hyderabad, Bangalore etc.

3. Mr. S. Mahadevan (Executive Director, Eastern Region)

He is responsible for overlooking the whole of the eastern region. The
eastern region consists of stations such as Kolkatta, north eastern states etc.

4. Mr. R. Harihar (Executive Director, Western Region)

He overlooks the whole of the western region. The western Region consists
of Mumbai, Vadodra etc.

MANAGERIAL HIERARCHY
64
The project was undertaken at the Northern Region, Indira Gandhi
International Airport, Palam. Therefore, the managerial hierarchy of the
Northern region is as under:

EXECUTIVE DIRECTOR

GENERAL MANAGER

DEPUTY GENERAL MANAGER

MANAGER
65
 ASSISTANT MANAGER

STAFF

DESIGNATION AMD GRADES IN NACIL (I)

GRADES DESIGNATIONS
1/2 Peons, Sweepers, Helpers

66
3/6 Office Assistants, Traffic Assistants
7/8 Superintendent
9 Superintendent ( Selection Grade)
9A Personnel Officer
10/12 Assistant managers
13/14 Deputy Managers
15 Managers
16 Senior Managers
16A Chief Managers
17 Deputy General Managers
18 General Managers
19 Directors (Regional Directors)
19A Senior Directors
20 Board of Directors
HUMAN RESOURCE POLICY

Policies are the broad guidelines as to how the objectives of a business are to
be achieved. While the objectives provide the ends, which a manager should
try to achieve, policies provide the guidelines which he should keep in mind
while achieving the ends. A policy is an established guiding canon premised
on objective devised to govern the activities of the business enterprise and
from which the basic percepts of conduct are derived.
A policy is designed to guide the organizational members to deal with a
particular situation in a particular manner. It delimits the area in which the
decision is to be made and assures that the decision will be consistent with
and contributive to business objectives.
The important features of policy can be stated as under:

BASED ON OBJECTIVES
Policies are based on the objectives of the enterprise, as these are guidelines

67
to achieve the predetermined objectives.

GENERAL AND SPECIFIC POLICIES

Policies are general, covering the whole organization, as well as specific,
relating to a particular department or a activity.

POLICIES MAY BE IMPLIED

All policies may not be statements. Some of policies are based on practices.
Thus, human resource policies can be interpreted as the recognized
intentions of top management with respect to the efficient management of
workforce.
Following are the human resource policies with regard to all functions of
human resource management adopted at NACIL (I):

EMPLOYMENT POLICIES
1. MINIMUM HIRING QUALIFICATIONS
Vacancies in NACIL are filled through direct recruitment from the open
market and through promotions.
The minimum eligibility criteria in NACIL (I) have been laid down
depending upon the nature of work, responsibilities and duties etc.
Eligibility criteria for some of the posts are as under:

PEON:
Age limit : 18 years to 30 years
(Upper age limit relaxable by 5 years for SC/ST
Candidates and 3 years for OBC candidates)
Qualification : Middle (class 8)pass
68
Experience : Three years experience of semi skilled mix jobs desirable

OFFICE ASSISTANT:
Age limit : 18 years to 30 years
Qualification : Matric with 60% marks in aggregate
Experience : 3 years clerical experience in an organization of repute
Desirable

MANAGEMENT TRAINEE (Commercial, personnel, stores):

Age limit : 28 years
Qualifications
Commercial
Post graduate diploma in Business Management with specialization in
marketing with a minimum of 60% marks from a recognized
institute/university.

Personnel:
Post graduate diploma in Business management with specialization in
personnel management/industrial relations/labour welfare from a recognized
university/institute.

Stores:
Post graduate diploma in Business management in materials management
from a recognized university/institute. After successful completion of
training the candidates are appointed as an Assistant Manager in respective
departments.
2. Preferred sources of recruitment
69
 Vacancies in NACIL (I) are filled through direct recruitment from open
market and through internal promotions and selections.
3. Procedure followed for recruitment
(a) Determination of vacancies
(b) Distribution of vacancies between general and reserved categories.
(c)Issue of employment notice/advertisement inviting application from the
candidates.
(d)Applications received in response to employment notice/advertisement
are screened with reference to eligibility criteria for the post.
4. Reliance on various selection devices such as tests, reference checks
and interviews
(a) After preliminary screening of applications the eligible candidates are
provisionally to appear for written/trait test.
(b) The candidates who qualify the written test/trait test are called for
personal interview.
(c) The interview is conducted by a duly constituted interview board.
(d) The candidates who are found suitable for the posts by interview board
are empanelled in order of their merit.
(e) The candidates are offered appointment for the post subject to their merit
in the panel and availability of vacancies.
(f) Finally the candidates are appointed in the company after completion of
pre employment formalities

TRAINING AND DEVELOPMENT POLICIES

1. IDENTIFICATION OF TRAINING NEEDS:

Training needs are identified on the basis of organizational analysis, job
70
analysis and manpower analysis. Specifically the need for training arises
with to the following objectives:
(a)To match employee specification with the job requirements and
organisational needs
(b) Organisational viability and transformation process.
(c) Technological advancement
(d) Organisational complexity
(e) Human relations

2. TYPES OF TRAINING:
Employees posted in different departments in NACIL (I) viz technical/non
technical undergo following types of training
Some of the training programs for technical employees are listed here
under:
(a) Basic aviation course
(b) Technician course
(c) Familiarization course of a particular aircraft etc.
Some of the training programs for non technical employees are listed
below:
(a) Professional development program
(b) Induction program
(c) Dynamics of building teams
(d) Non engineering awareness of aircraft etc.
Programs are also conducted for executive development in NACIL (I).

TRANSFER AND PROMOTION POLICIES

71
1. RATIONAL OF TRANSFER:
NACIL (I) has well defined transfer policy for its employees. employees are
transferred from one station to another and from one department/section
another to fill the vacancies or shoulder the higher responsibilities.

2. PERIODICITY OF TRANSFER:
Normally the employees are transferred from one station to another for a
period ranging from 1-3 years. When employees are transferred from one
station to another by the management they are eligible for transfer benefits
as per the rules of the company.
3. PROMOTION POLICY:
Employees in different cadres are promoted to the higher posts subject to
fulfilling certain conditions viz. seniority, length of service, satisfactory
service records etc. In certain cadres employees are promoted to the higher
posts in a time bound manner. For some posts internal employment
notification are issued inviting applications from internal candidates. These
candidates are subjected to written tests/interview before they are promoted
to higher post subject to their suitability and number of vacancies.

COMPENSATION POLICIES
1. INCENTIVE PLANS:
There are various incentive plans for the employees of NACIL (I) as per
their designation and responsibilities in the organization. The incentive
plans include overtime, bonuses and other various kinds of such benefits.
There are certain guidelines to be followed for working overtime which are
as under:
(a)The shift should be so arranged as to ensure that no employee is made to
72
work for more than 38 hours or 44 hours or 48 hours in a week.
(b)Also a minimum rest period of 11 hours should be there before an
employee is called upon to work in succeeding shifts.
Apart from the overtime various kinds of bonuses are also provided to the
employees on major festivals.
There is a scheme in NACIL (I) to give incentives to the employees linked
to productivity.
2. NON MONETARY REWARDS:
Non monetary rewards are those which do not involve any kind of financial
benefit to the employees. Some of the non monetary benefits in NACIL (I)
are recognition of good work, appreciation letter, providing challenging
work assignments to the employees etc.

INTEGRATION AND HUMAN RELATIONS POLICIES

1. HANDLING OF GRIEVANCES:
A grievance is any kind dissatisfaction or disagreement relating to any
employee arising out of the implementation of the policies, rules and
regulations, or decisions of the organization.
An aggrieved employee may not perform the assigned job in the effective
manner. Therefore, grievance redressal machinery is existing in NACIL (I)
to redress the grievances of the employees.

2. WORKERS PARTICIPATION IN MANAGEMENT:

Employees viewpoints and opinions are also often considered to arrive at a
major decision related to the company.

73
3. DISCIPLINE :
Discipline is some sort of a strict training or the enforcing of rules,
intended to produce ordered and controlled behavior in oneself or others.
There are two sets of standing orders framed by the company for enforcing
Discipline in the company so that production and productivity do not suffer.
In the two sets of standing orders there is a illustrative list of misconducts.
When an employee commits misconduct in the company a departmental
enquiry is conducted as per the laid down procedure. If an employee is
found guilty of the charges a punishment commensurate to the misconduct
Committed by the employee is imposed upon him.

4. WORKING CONDITIONS AND WELFARE POLICIES:

Welfare is basically the efforts made so as to ensure well being status and
to help or facilitate one so that he/she can achieve his highest performance as
well as personal satisfaction.
Welfare facilities can be categorized in two parts –Statutory and non
statutory.
(a) Statutory welfare facilities
The following Acts contains the provisions to provide mandatory welfare
facilities to the employees:
(i) Workmen Compensation Act, 1923
In case of a temporary or permanent injury, caused to an employee while in
service, the organization has to provide the compensation to the employee.
(ii) Payment of Wages Act, 1936
Earlier wages were not paid on time. According to this act, the wages and
salaries will be paid on fixed time and all the deductions done would be told
to the employees.
74
(iii) Industrial Disputes Act, 1947
According to this act, a committee known as works committee is formed
which deals with the welfare of the employees at the grass root level. The
members of this committee are 50% from the employer’s side and 50% from
the employee’s side.
(iv) Factories Act, 1948
This act takes care of the service conditions, work environment etc. given to
the employees. It also keeps a check on the working hours and action is
taken whenever the regulations are violated.
(v) Employees State Insurance Act, 1948
According to this act, if the employee or his family members are sick then
the company looks after their health i.e., most of the money is given by
NACIL.
(vii) Payment of Gratuity Act, 1972 NACIL can pay a maximum of 3.5
lakhs as gratuity. This is a statutory and deviation is possible.
(b)Non statutory welfare facilities
Non statutory welfare facilities are those facilities which are provided to
the employees over and above the law.
Some of the non statutory benefits provided by NACIL (I) to its employees
are as mentioned below:
(i) Scholarships are provided to the wards of the employees performing
exceedingly well in academics. It starts from class II and it is provided up to
post graduation level.

75
(ii) Particulars Amount (inRs.)
Class II - Class IV 125
Th Class V – Class VIII 250
e Class IX – Class XII 375
For Graduates 500
For Diploma Holders 625
For Engineering/MBA etc. 750
employees of NACIL (I) are also entitled for free an discounted passage to
travel.
This is also a non-Statutory welfare facility. It is given to three types of staff:
(a) For Permanent staff:
It starts after the completion of 1 year. Air passage for the permanent staff
is shown in the table below:

Years of
service Free Air Discount(95%) Discount(85%)
Tickets
1–5 2 - 3
5–7 2 1 2
7 – 10 2 2 1
10 – 20 2 3 -
20 – 25 2 4 -
25 & Above 2 5 -

(b) For Retired staff:

Retired employees with minimum 15 years of service are eligible for this Air
passage benefit. This non statutory benefit is shown in the table below:

76
 Years for service Free Air tickets Discount (95%)

15 – 20 1 2
20 -25 1 3
25 & above 2 4

Retired Employees are also given this benefit:

 Passage for SOL (Staff On Leave)

This passage is for the employees and his family.
 Passage for SOD (Staff On Duty)
SOD is granted additional passage for the purpose of any
official work.

2. For Deceased Employees :

 If any employee dies while service then, he will get Air Passage
benefits half of what he was actually getting while working.

 If any employee dies after retirement then, he will get Air

passage benefits half of what he was actually getting after
retirement.

77
For deceased employees, Air Passage benefits will be given only to
employee’s spouse or children

Note:
• Family is inclusive of spouse& children
• Spouse- Husband/ wife
• Children- Daughter/Son/Daughter-in-law/Son-in-law.
• Passage year for the 2 years can be combined.
• Passage year starts from 1st August – 31st July.
• Food facilities are included in the passage.
(iii) NACIL (I) also provides housing facilities to their employees on the
basis of their grades and seniority level.
(iv) Holiday homes have also been established at number of hill stations
and other places of tourist interest for which employees are required to pay a
to a nominal rent.
(v) Group insurance scheme
(vi) Festival advance
Festival advance is also provided to the employees of NACIL (I) to the tune
of Rs. 4000 on festivals like Diwali, Dussehra, Holi etc.
(vii) Housing and miscellaneous loans
(a) Housing loan
Housing loan is also another non statutory welfare facility provided
byNACIL (I) to its permanent employees. Housing loan is given to the
employees who fulfill the following laid down conditions:
(i) The employee should have completed at 5 years of service.
(ii) The loan is to be given for the construction of a house.

78
(iii) The loan is also provided for the purchase of readily built house or a
flat.
(iv) The rate of interest on the loan provided is to be 5%.
(v) The recovery of the housing loan given to the employees is done in 240
installments i.e. (180+60)
NACIL (I) also provides loan for the repair and modifications to be done in
the house as per the following conditions:
(i) The employee should have completed at least 6 years of service in
NACIL (I).
(ii) The rate of interest on the loan provided is 5%.
(iii) The loan is to be recovered in 60 equal installments.
(b) Vehicle loan
(I) Purchase of car
Loan for the purchase of car is provided subject to the following condition:
(i) At one year of service has been completed by the employee.
(ii) Rs. 75,000 is to be provided for the purchase of a new car and Rs. 50,000
for the purchase of old car.
(iii) The rate of interest on such loan is charged at the rate of 6.5% p.a.
(iv) The loan is recovered in 100 equal installments.
(II) Purchase of two wheelers
The conditions for providing loan for the purchase of two wheeler is as
under:

(i) The employee should have been in service for at one year.
(ii) Rs.15000 is to be provided for the purchase of a new vehicle and
Rs.6000 for the purchase of old vehicle.
(iii) The rate of interest on such loan is to be charged at 6.5% p.a.
79
(iv) The loan is to be recovered in 60 equal installments.
(c) Miscellaneous loans
(I) Marriage of ward
The conditions for the loan to be provided for the marriage of wards of
employees are as given below:
(i) The employee should have completed at least 15 years of service.
(ii) The rate of interest on such loan is to be charged at 6.5% p.a.
(iii) The loan is to be recovered in 60 equal installments.
(II) Religious ceremonies
(i) The rate of interest on such loan is to be charged at 4.5% p.a.
(ii) The loan is to be recovered in 60 equal installments.

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 MARKETING POLICY

Marketing is an exchange transaction that takes place between a buyer and

seller. Thus, marketing includes all those activities which facilitate transfer
of goods, services and ideas from its producers to the users of
goods.Marketing includes not only selling but also other activities such as
advertising. After sale service, marketing research etc. It focuses on the
needs of the buyer.
Marketing begins before production and continues even after the sale has
been effected. It emphasizes creation and maintenance of demand. It seeks to
achieve profits through customer satisfaction and is thus externally oriented.
Marketing emphasizes long term goals such as growth and stability.
Customer satisfaction is the key word of the concept of marketing.Therefore
the concept of marketing rests on four pillars:
1. Identification of target market
2. Understanding customer needs
3. Integrated marketing
4. Profitability

81
Based on the above concepts of marketing NACIL (I) has formulated
marketing policy. Being an aviation company it sells its products i.e. seats
for passengers and space for cargo to its customers. Since marketing is a
continuous process, it regularly identifies the target market and customer
needs. The marketing department of NACIL (I) has the responsibility of
understanding the customer needs and wants.
It helps in shaping its products and services in accordance with the customer
needs.
Accordingly it makes passenger friendly schemes so that it can attract more
and more passengers. From time to time it formulates policies with regard to
various fare schemes, tour packages, discounted tickets, providing better and
new connections etc. to its valued passengers.
Once the various schemes related to passengers and cargo are drawn by
marketing department, the integrated marketing takes place in two ways.
First, these schemes related to air fares, cargo tariff etc. are given wide
publicity through various channels of media to make it known to the
prospective customers. Secondly, the employees are also trained and
motivated to serve the customers.
In the current scenario of stiff competition in aviation field marketing
department has a pivotal role to play. To face the challenges from competitor
airlines, NACIL (I) draws various attractive fare schemes for passengers
from time to time depending upon the current market trend in aviation
sector. Some of the promotional schemes, holiday packages, flexi fare plans
etc. for passengers currently in vogue are as under:

A) PROMOTIONAL SCHEMES
1. Corporate super saver

82
2. Super Saver Schemes
3. Spot Fares
4. Flight Specific Fares on Select Sectors
5. Air India (IC) - ABN Amro Bank Debit Card
6. IA – Amex Co brand Card
7. Bid & Fly
8. Touch – 25&Touch- West Application Forms

B) FREQUENT FLYER PROGRAMMES

NACIL (I) has offered a flying return program to the individual members
above the age of 12 years residing in certain specified countries which are
as under:

1. Indian programme – India

2. USA/UK/Canada programme

3. SE Asia and Far East programmes

As a member a passenger can earn points every time he/she flies Air India
which can be exchanged for free flights. A passenger can take advantage of
accruing mileage points on airline partners, non airline partners and on select
flights of code share airline partners.

C) HOLIDAY PACKAGES

The holiday packages offered by Air India can be classified into two
following categories:

83
 (i) Domestic packages

(ii) International packages

A few of the existing domestic holiday packages offered to the passengers

for the following destinations:

(i) Andaman’s

(ii) Gateway combo

(iii) Goa

(iv) Jammu & Kashmir

Some of the international holiday packages are offered in the following

countries:

(i) Bhutan

(ii) Malaysia

(iii) Singapore

(iv) Thailand

Apart from these schemes the passengers are offered facilities

84
TELE-CHEK IN:

If you have a confirmed seat and plan to

travel with hand baggage only, you can tele
check-in for the next day too and report at
the Tele check-in counter atleast 30 minutes
prior to the flight departure.(only for J Class
& FFP Members ).This facility is available in the 6 metros - Delhi,
Mumbai, Calcutta, Chennai, Bangalore & Hyderabad.

CITY CHEK IN:

Now you can check-in at the Indian Airlines

city booking office for not just the same day
flights but also for the next day. If you are
travelling with hand baggage only, please
report atleast 30 minutes prior to the
departure at the Airport check-in counter. If you have check-in baggage,
regular reporting time is applied. This facility is available in the 6
metros Delhi, Mumbai, Calcutta & Chennai.

RETURN CHEK IN:

Now you can return check-in if your flight

is on the same day or the next. Collect your
return boarding card from the originating
station and report to the airport just 30
minutes before departure if you're travelling

85
with hand baggage only. It is valid for flights between the 6 metros -
Delhi, Mumbai, Calcutta, Chennai, Bangalore & Hyderabad

THROUGH CHEK IN:

You can board your connecting onward

flight without having to check-in again,
even if it's upto 24 hours later. Your
baggage will also be through checked-in.

REPORTING TIME:

As the departure and arrival terminals are located at considerable

distance and in order to provide connection to passengers and their
baggage on thier immediate flight, following minimum connecting
timings are followed at the folowing cities.

86
 All station in india Domestic to Domestic 0.45 Hrs.
International to
1.30 Hrs.
International
International to
2.30 Hrs.
Domestic
Domestic to
2.00 Hrs.
Delhi, Mumbai International
International (Dom.
1.30 Hrs.
Leg) to Domestic
Domestic to
International (Dom. 1.30 Hrs.
Leg)
Other International International to
1.30 Hrs.
Airports International
Chennai, Kolkata, International to
2.00 Hrs.
Hyderabad, Domestic
Bangalore, Ahmedabad, Domestic to
2.00 Hrs.
Amritsar, International
Lucknow, Varanasi, International (Dom.
Trivandrum, 1.15 Hrs.
Leg) to Domestic
Cochin, Calicut, Trichy, Domestic to
Coimbatore, International (Dom. 1.15 Hrs.
Gaya, Guwahati, Goa Leg)
International to Local MC
International Practice
Other International Domestic to Local MC
Airports outside India International Practice
International to Local MC
Domestic Practice

ATTRACTIVE FEATURE OF THE COMPANY

87
The induction of the first Airbus aircraft on ordered in October-2006, after a
gap of 12 years, has infused renewed enthusiasm and energy in national
carrier Indian. The trials and tribulations of competition not withstanding,
Indian continues to play a leading role in Indian Aviation. Six more new
aircrafts would be delivered by the end of 2007 with the total delivery being
completed by early 2010. Indian has placed an order of 43 aircrafts of
Airbus family. 20 A-321s, 4 A-320s and 19 A-319s.
Taking advantage of technology upgrades in the industry, Indian has signed
agreements with two major Global Distribution System (GDS) service
providers Galileo and Amadeus. Along with the existing arrangement with
Abacus. These tie-ups will help Indian travel agents to widen the
distribution network and reach of the airline and make it more competitive.
Another upgrade on the anvil is the state of the art Passenger Service System
(PSS), which will give customers the advantages of an advance system of
customer servicing.
Some of the recent initiatives taken by the airline for the benefit of corporate
travelers, leisure travelers and frequent fliers are

 Easy fares, unchecked fares and spot fares which are lowest in the
market.
 I-Mint loyalty programs with five other leading brands like ICICI

bank, Lifestyle, HPCL, Airtel and Make My Trip.com which

enables members to earn and redeem points on any all the six
partner companies.
 E-ticketing. No more bother of lost or misplaced tickets.
 A unique touch 10/touch 20 scheme wherein 10 times travel on

specified domestic sectors within three months would reward a

88
 passenger with 2 free tickets similarly, for 20 times travel 4 free
tickets would be awarded.
 Desh-Videsh and super saver utsav scheme proved usually popular.

 JV with Amex and ABN-AMRO for co-branded debit and credit

cards which offer a host of benefits.

89
 HONOURS AND AWARDS

The commitment of the company towards providing improved services to

passengers as also enhancing the value of it’s and product got reflected in
the various awards and accolades which were bestowed upon the company
different organization. Some of the important honors’/ awards given to IAL
during the year were:

 IA tour package “Uniquely Enriching School Trips” has been

selected as the winner for the “Best Singapore Travel Experience-

India” category in the 20th Tourism Awards 2005 announced by the
Singapore Tourism Board.
 Airbus industrie awarded Indian Airlines with the A-300 Operational

Excellence and Reliability Award for Engg. related operational

excellence.
 Indian Airlines was awarded with Consumer World’s “Mera Brand”

Award for customer service.

 An Indian airline was recognized as the Premier Service Brand as

per the Economic Times Brand Equity survey conducted in

association AC Nielson-ORG MARG Survey.
90
 PROMOTIONAL SCHEMES

Indian Airlines operates to total of 55 domestic and 18 international stations.

Further, it has 10 domestic and 1 international offline stations. To support
this vast network of operations and to keep pace with the changing market
dynamics, the company has introduced from time to time various
promotional schemes to retain the market share as well as competitiveness.
The various scheme offered are:-

 “Spot fares” were introduced offering discounted fares for last minute
travel of passengers at the airport.
 “Lean Sector Promotional Fares” were made available on Delhi
Mumbai sector.
 “Excursion Fares” are available on Bangalore-Delhi- Bangalore and
Hyderabad-Delhi- Hyderabad in economy class.
 “J Smart Business Class Companion Offer” was introduced wherein
passengers’ paying full business class fare was permitted to take a
companion at 50% discount on domestic/ international sectors.
 “Package Tours” for promotion of domestic tourism wherein IAL
offers a discount of 15% on the INR fare component on all domestic
sectors for sale by Indian Airlines approved Travel Agents.
 “Common Interest Group Concession” is applicable on domestic
sectors wherein a discount of 10% is offered in economy class on the
INR fare level available to a group of minimum 10 full fare paying
passengers.
 “Indian Family Fares”
91
  Indian Airlines and Indiatimes Auctions have launched Bid & Fly.

Auctions for air tickets just one week in advance. Now bidding and
flying is easier than ever. We have 100's of flights everyday on
auction at huge discounts.

 Owing to the encouraging response received for "Super Saver Utsav

Plus" offer and the widespread demand for its extension, IA has
extended the "Super Saver Utsav Plus" offer.

The details of offer are as follows:

A) Super Saver Utsav Plus:
Amount (Rs.)

Vilidity
(In
Economy Executive months)
I) Super Saver Utsav Plus - 4
Coupons 29,300 41,300 4
Additional Ticket - 2 Coupons
(Optional) 8,400 11,400 6
Total 6
Coupons 37,700 52,700

92
II) Super Saver Utsav Plus - 8
Coupons 60,600 83,600 6
Additional Ticket - 4 Coupons
(Optional) 12,800 16,800 8
Total 12
Coupons 73,400 100,400

 Indian has re-introduced the "Corporate Super Saver" scheme on

popular demand, with the following fares:

Econom Executiv
Validity
Type of Ticket y e
(in months)
(Rs) (Rs)
1. Corporate Super Saver - 12
75,400 1,10,400 6 Months
Coupons
2. Corporate Super Saver - 20
1,14,000 1,59,000 8 Months
Coupons

I. Can be issued only to Corporate Houses / Companies, against a

request letter on the letter head.

II. Can be used by multiple users / employees belonging to the same

corporate. However, each user / employee must carry the

company issued ID card while traveling with the Corporate Super
Saver ticket.
III. Corporate Super Saver tickets consist of either 12 or 20

individual single coupon tickets with jackets.

 The 'Indian Family Fares' is being re-launched for sale wef 01st April

93
 2007 till 30 th September 2007.
The applicable fares are as under:
Economy Executive
Class Fare Class Fare
Any two Members of a Family

(Two return tickets, each ticket with two

Rs. 27,800* Rs. 41,800**
coupons)

Additional Member of a Family

(One return ticket of two coupons) Rs.11,400 Rs.14,400

I. Maximum of six family members , are allowed under the 'Indian

Family Fares' scheme.

II. Travel must be completed within a period of 60 days from the date
of the commencement of travel on the outbound sector.

III. Proof of family Identification is required.

 Spot Fares in Executive Class are available on 'first come, first served'

basis, and are open for sale a few hours prior to departure of flights,
subject to availability of seats.
 In order to facilitate, it has been decided to extend the validity of

Super Saver Tickets. The modalities are as follows: All 'Validity

Expired Super Saver Tickets' (including those tickets whose validity

94
 was extended under previous offers) will be considered for extension
of validity.
 "Economy Premium Fares", an exciting offer to enable you to

experience executive class travel for a little more than economy class
fares! Travel in Executive Class by paying the "Economy Premium
Fare" which is nominally higher than the Normal Economy Class
sector fare.

 Indian Airlines and American Express have jointly launched the

globally valid 'Indian Airlines - American Express Co-brand Card' with no
preset spending limit for our esteemed customers. The card offers
powerful rewards and benefits tailored to meet the spending, payment and
travel needs of Indian Airlines and Alliance Air customers and American
Express Card members. These cards would enable the card members to
earn free flights faster.

AT THE AIRPORT

1-KERB SIDE ASSISTANCE:

At the four major metro airports, a special counter has been opened which is
accessible from outside the airport and provides assistance for passengers
needing extra care such as senior citizens, unaccompanied minors,
passengers on wheel chairs and disabled passengers etc.

2-TRANSIT FACILITY:

At the four major metro airports, a special counter has been opened which is
accessible from outside the airport and provides assistance for passengers
95
needing extra care such as senior citizens, unaccompanied minors,
passengers on wheel chairs and disabled passengers etc.

3-CUSTOMER/PASSENGER SERVICE COUNTERS:

All major airports have a well-designated customer services counter to

handle all passenger queries and to provide special assistance in case of
delayed/ disrupted flights.

4-FREQUENT FLYER PROGRAMME COUNTERS:

The Frequent Flier Programme of Indian Airlines - 'Flying Returns' - offer a

designated Flying Returns counter at major metro airports to handle queries
and offer any special assistance required by the FFP member.

96
 GOVERNMENT POLICY

Indian economy has over the past five decades grown from primarily
agrarian economy into a service sector dominated economy. The service
sector includes banking, insurance, aviation etc. The aviation industry in
India has witnessed a recent upsurge due to the Indian expertise in
information and technology and growth in the number of middle class
families. The fact that nine scheduled airlines are operating in the Indian
skies is the testimony to how rapidly the aviation industry is growing. If the
present growth trend can be sustained, civil aviation will become the vehicle
for take off for the Indian economy in the coming decade. The recent
growth in the air transport sector and strength of the Indian economy has
reassured the entrepreneurs about healthy growth prospects for civil aviation
in India. Therefore it is not surprising that a number of new airlines are
proposing to enter the market while existing airlines are going for significant
fleet expansion/renewal program. Five new airlines viz. Air Deccan,
Kingfisher, Spice Jet, Paramount airways and Go Air have started operation
in the last one year or so.
At present there are nine scheduled airlines operating in the country which
are stated as under:

1. Air India Ltd.

2. Jet Airways Pvt. Ltd.

3. Deccan Aviation Pvt. Ltd.

4. Kingfisher Airlines

97
5. Royal Airways (Spice Jet)

6. Paramount Airways Pvt. Ltd.

7. Go Airlines

8. Blue Dart Aviation Ltd.

9. Alliance Air Ltd.

Government has also granted “No Objection Certificate” to two more

airlines companies to operate scheduled air transport services. These
companies are likely to commence air transport services after getting the
“Operating Permit” from the Directorate General of Civil Aviation. These
companies are:

1. M/s Inter Globe Aviation Pvt. Ltd.

2. M/s Indus Airways Pvt. Ltd.

The air transportation services in India are controlled by Directorate General

of Civil Aviation (DGCA), operating under Ministry of Civil Aviation,
Government of India. It is the Ministry of Civil Aviation that formulates
policies and other directives for Air India and other airlines. It is mandatory
for all the airlines to adhere to the policies and directives framed by the
ministry.
The various policies framed by the government for aviation business
keeping the in view the best interest of the industry are as under:

98
1. OPEN SKY POLICY

Non availability of seats to and from India during the peak winter season has
been one of the major constraints faced by the passengers. In order to ensure
sufficient availability of seats, a limited open sky policy was adopted by the
government under which designated airlines operated additional services
to/from India subject to the existing terms of agreement with Air India. A
number of airlines responded to the offer and operated over 2400 additional
flights to different airports in the country.

2. SIGNING OF A REVISED AGREEMENT WITH USA

A revised Air Services agreement between India and USA was signed in
2005 replacing the previous agreement between the two countries. The
revised agreement grants unlimited access to the designated airlines to any
points of call in the territory of other country. Besides, the revised
agreement also removes restrictions on the exercise of the traffic rights, code
share rights and provides for greater operational flexibility.

3. LIBERALIZATION OF AIR SERVICES WITH UK

As a part of liberalization of air services between India and UK the

designated airlines of both the sides may operate up to a combined total of
42 services per week. Apart from this the designated airlines of UK may
operate on any other or routes between India and UK, subject to a total
capacity limit of 7 services/week to/from each airport in India except that in
case of Bangalore and Chennai only. Reciprocally, the designated airlines of
India may operate without capacity limits on any other route between India
and UK.

99
4. LIBERALIZATION OF AIR SERVICES ON OTHER ROUTES

Traffic rights were enhanced with the following countries to enable greater
connectivity to/from India: Brazil, Australia, UK, Saudi Arabia, Yemen,
Israel, UAE, Germany, USA, China, France, Iran, Mauritius, Oman, Taiwan,
Qatar, Netherlands, Belgium, and Canada.

5. PROGRESS IN THE IMPLEMENTATION OF 7+7 POLICY

In pursuance of the policy framework to permit the designated airlines of all

the countries having Air Services Agreement with India, the designated
airlines of Austria, Finland, Republic of Korea, Maldives, Armenia etc. have
been offered additional capacity, as requested by the respective
governments, subject to reciprocal rights of Indian carriers.

6. OPENING UP OF INTERNATIONAL ROUTES FOR PRIVATE

CARRIERS

With a view to enhance better connectivity on international routes, Indian

scheduled carriers with at least five year’s continuous operations in domestic
sectors and fleet size of 20 aircrafts have been permitted to operate to all
overseas destinations except Gulf countries of UAE, Qatar, Oman, Bahrain
and Kuwait as well as Saudi Arabia. Due consideration is given to the
operational plans of Air India while allotting entitlements to other Indian
carriers.

7. POLICY REGARDING COMMERCIAL AGREEMENTS

Government will not henceforth mandate any commercial agreement as part

of bilateral agreements. All new operations by foreign carriers, both on new
100
destinations as well as on existing routes would be free from the obligations
of mandated commercial agreements.

8. FOREIGN DIRECT INVESTMENT IN AVIATION SECTOR

The central government has increased the Foreign Direct Investment limits
in “Air Transport Services” and revised limits are as under:
(a) 49% through automatic route

(b) 100% by Non Resident Indians through automatic route

9. NEW STATIONS CONNECTED/OPERATED BY AIR INDIA

Air India ha started flights to Shanghai and Los Angeles and also introduced
terminator flights from Ahmedabad to London. Air India has identified need
for non stop operations to USA and is tailoring its fleet acquisition
accordingly. Services to the following 12 destinations have been planned in
a phased manner:
San Francisco, Washington, Houston, Toronto, Manchester, Soul, Taipei,
Mauritius and South Africa.

10. FLEET ACQUISITION POLICY

Air India has a present fleet strength of 136 aircrafts. The airline has placed
order for 111 more aircrafts – 68 boeings and 43 airbus. Out of these 20
have been already inducted into the fleet. All these state of the art aircraft
will be equipped with latest passenger amenities.

11. LOW COST OPERATIONS BY AIR INDIA

In what is boon for Indians working in the Gulf region and SE Asia, Air
India has operationalised “Air India Express”, a new budget carrier by

101
inducting 14 boeing aircrafts. Flights to the Gulf countries and S.E Asian
countries are being operated at substantially reduced fares.

12. CARGO OPERATIONS BY AIR INDIA

The government has given nod to NACIL (I) for the conversion of five
B737s into freighter aircrafts to use them on a hub and use Nagpur airport as
a hub to offer express/retail courier services.
The government is also planning to significantly expand the cargo
operations in a phased manner.

13. INITIAL PUBLIC OFFERINGS OF AIR INDIA

The Government of India and the company’s Board of Directors in a

meeting have approved the IPO of the airline in order to strengthen the
airline’s equity base.

14. RESTRUCTURING OF DELHI AND MUMBAI AIRPORTS

Government is upgrading and modernizing airports of Airport Authority of

India at Delhi and Mumbai by adopting a joint venture route. The
government has given nod to GMR to go ahead with the modernization of
Delhi airport and GVK is responsible for modernizing the Mumbai airport.

15. SETTING UP OF GREEN FIELD AIRPORTS

Greenfield airports projects at Devanahalli near Bangalore and Shamshabad

near Hyderabad are being built on a Build Own Operate and Transfer
(BOOT) basis with Public Private Ownership (PPP). The Greenfield airports
are the eco-friendly airports which do not harm the environment.
102
16. MODERNIZATION OF NON METRO AIRPORTS

Airports Authority of India in consultation with Government of India has

proposed to modernize 35 tentatively selected non metro airports to world
class standards in phases with focus on airside and city side development
and enhancement of non-aeronautical revenue. The financing issues
regarding these projects are being examined by the Task Force constituted
by the Planning Commission.

17. AIR TRAFFIC MANAGEMENT

The Airports Authority of India manages one of the biggest airspace in the
world which encompasses huge area of oceanic airspace in the Bay of
Bengal and Arabian Sea area.

Total Airspace : 6.0 million sq. km. (approx)

Land Area : 2.2 million sq. km. (approx)
Oceanic Area : 3.8 million sq. km. (approx)

The entire airspace has been divided into five regions: Delhi, Mumbai,
Kolkata, Chennai & Guwahati for better and efficient airspace management
functions.
The air traffic in India has registered a rapid growth in the recent past and is
forecast to multiply further in the immediate future. The phenomenal rate of
growth has resulted in air traffic congestion and delay at many airports and
in the Indian airspace. To address the growing needs of upgrading the ATM
system, the AAI and the Government of India proposes to take up the
following:

103
(i) ATS Automation

(ii) Up gradation of ground services

(iii) Up gradation of CNS facilities

(iv) Up gradation of MET facilities

18. INTERNATIONAL AIR CARGO FACILITIES

The Government of India and AAI has established international cargo

facilities at four domestic airports namely Nagpur, Guwahati, Lucknow and
Coimbatore. As far as Air India is concerned, it has decided to operate
dedicated freighters on key cargo routes i.e. India/Europe/USA, India/Japan,
India/Singapore and India/China.

19. CARGO HUB AT NAGPUR

There is a proposal from the Government of Maharashtra to construct

International Multi Model Passenger and Cargo Hub at Nagpur. The
Ministry of Civil Aviation is willing to transfer the Nagpur airport to the
Government of Maharashtra subject to the finalization of modalities. The
cabinet has approved international status to Nagpur airport and also
approved re naming it as Dr. Ambedkar International Airport.

20. NATIONAL FLYING TRAINING SCHOOL

To cater to the increased demands of pilots for the expanding aviation sector
the facilities at the National Flying Training School at Fursatganj are to be
increased so that it can train 100 students per year for CPL as against the

104
present 30. A new state of the art and world class National Flying Training
School is also to be set up at Gondia in Maharashtra.

21. AIR CONNECTIVITY TO NORTH EAST AND OTHER REGIONAL

ROUTES

The government has taken several policy measures to bring the north-eastern
states and other backward areas in the mainstream. Connecting them with
the air services is one such policy measure taken by government. The
government has given permission to various scheduled airlines to operate on
the north-eastern and various other routes. At present Air India, Jet Airways
and Kingfisher Airlines operate to the north-eastern states. The stations
covered by these airlines are Dibrugarh, Guwahati, Jorhat, Lilabari, Silchar,
Tezpur, Imphal, Aizwal, Shillong, Dimapur and Agartala.

The following table will summarize the airline operation in north-east:

Air India Jet Airways Jet Lite Air Deccan

Stations 11 4 2 2
City Pairs 26 9 4 5
Flights/week 126 31 14 14

22. COMMITTEE TO REVIEW THE FUNCTIONS AND ROLE OF

DGCA

The Government of India in consultation with the Ministry of Civil Aviation

has constituted a committee to consider the latest growth in aviation sector,
change in the scope and activities, necessity to comply with the ICAO
standards and recommended practices and to fine tune the role and functions
of the DGCA with the civil aviation organizations the world over.

105
23. MERGER OF INDIAN AIRLINES AND AIR INDIA

The decision of the government to merge the two national carriers i.e. Indian
Airlines and Air India is an important step towards the improving the
operational efficiency. The merger will take place in a phased manner and is
expected to be complete by the year 2009. The new merged company known
as the National Aviation Company of India Limited (NACIL) with its brand
name as Air India is one of the largest aviation companies in India now. The
merged entity is now expected to provide better services and facilities both
in the air and on the ground to its passengers.
The above policies are framed by the Government of India in consultation
with the Ministry of Civil Aviation for the upliftment of the aviation sector
in India. The aviation sector has up surged tremendously in the last decade.
Therefore, a suitable and a sound policy are required to sustain this growth
so that the Indian economy also surges ahead.

106
 ASSIGNMENT PROFILE

The assignment profile at Indian airlines was divided in different parts: First
of all we have to go for ten days general training by Mr daleep
kumar(Dept .manager finance).He give us whole idea of Indian airlines ,the
historical background of Indian Airlines , the functioning of all the
Department of Indian Airlines, the reason behind revenue is centralized.
Now afterwards we have to go different department of Indian airlines to
know their work. ie.what that particular department is all about .
The sections and functioning of those sections in the finance department are
as under:

FUNCTIONING OF THE FINANCE DEPARTMENT IN NORTHERN

REGION
Finance Department:

[A] Area Revenue Division, Safdarjung:

• Agency Section
• Screening Section
• Bills Receivable Section

[B] Expenditure Division, Palam:

• Bill Passing - Local
• Bill Passing - Outstation
• Provident Fund

107
 • Payroll
• Cash & Bank
• Bill Raising & Realization
• Finance & Budget

AREA REVENUE DIVISION

The basic function of Area Revenue Division (ARD) is to book "Traffic

Revenue" earned by Indian Airlines in its books. The various components of
Traffic Revenue are:

1. Mail Revenue: This is the revenue derived from the carriage of Mail on
the routes of the carrier.
2. Airfreight Revenue: It is the revenue derived from carriage of cargo on
the routes of the carrier.
3. Excess Baggage Revenue: It is the revenue derived from carriage of
excess baggage on the routes of the carrier.
4. Passenger revenue: It is the revenue derived from the carriage of
passengers over the routes of the carrier.
5. Pool Revenue: Pool is an agreement entered into by two national
carriers operating on the same route, to pool their revenue in a kitty and then
share the same on a mutually agreed basis. The main object of such
agreements is to make the services operated by the Pool Partners

108
complementary and not competitive. Revenue generated by such a pool is
Pool Revenue.
6. Charter Revenue: It is the revenue derived from the Chartering

operations. Charter is a special arrangement, whereby for an agreed

operation, the carrier places the entire capacity of an aircraft at the disposal
of the person requesting for charter services. All these revenues are book by
ARD in books of Indian Airlines with an instrument of maintaining records
known as "Reporting Form".

Hierarchy at Area Revenue Division

SENIOR
MANAGER
(ARD)

Dy. Dy.
Dy.
MANAGER(S) MANAGER(s)
MANAGER(s)
(SCREENING) (B/R SECTION)
(AGENCY)

ACCOUNT
ACCOUNT ACCOUNT OFFICER(S)
OFFICER(s) OFFICER(s)

STAFF
STAFF STAFF

109
Role of key staff at different sections of ARD:

1. Agency: Deals with the agents of Indian Airlines and maintain records
of all the transaction or sales done by Agents through Reporting Forms.

2. Screening: Performs the sequential screening of all the Reporting

Forms and execute Interline Billing.

3. Bills Receivables (B/R): It maintains the records of all the credit

parties of Indian Airlines and raise bill or debit notes to such parties for
services rendered to them by Indian Airlines.

1. Agency Section

The key staff at this section deals with the agents of Indian Airlines and
maintains records of all the transactions or sales done by the agents through
the reporting forms. About 80% of Indian Airlines sales are through its
agents & there are about 600 Indian Airlines agents in Northern Region.
The Agency Section at ARD deals with all Indian Airlines agents maintains
records, take disciplinary actions against defaults if any & prepare concealed
summary of all transaction through agents for the Head Quarters.

Agent: An agent is an individual or an organization authorized to act for

and on behalf of an airline, subject to the terms and conditions specified in
the Agency Agreement. Passenger Agents of Indian Airlines are authorized

110
to issue Passenger Tickets and Cargo Agents are authorized to issue
Consignment Notes/Air Waybills.

There are two kinds of agents:

• General Sales Agent (GSA): A GSA is one and only one agent
authorized by Indian Airlines to operate in a particular country
however he can have sub-agent under him. Indian Airlines have their
GSA's in U.K., U.S.A., Russia and Canada. GSA's are entitled to
Special rates by Indian Airlines as per the contract.
• Passenger Sales Agent (PSA): When various Sales agents are
appointed by Indian Airlines for the same region, they are known as
PSA's. The rates for all the PSA's are same and fixed in advance.

The various functions performed by Agency Section are as follows:

1- APPLICATIONS FOR NEW AGENCY:

New applicants apply to the commercial department, which scrutinize
the applications at very step and then forward the applications to the
finance department. Finance Department checks the financial viability
of the applicant and confirms the Bank Guarantee provided by the
applicant. Bank Guarantee should be at least of Rs. 2 lacs. Once the
verification of documents is complete the Agency Section allots an
agent with a unique code. Bank Guarantee is taken from the agents and
tickets are issued to the agent.

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a- MAINTAINING RECORDS OF AGENTS:
Agents are required to submit details of each and every transaction or
sale to ARD, records of which are maintained by agency section.
Agents are supposed to submit following Reporting Forms:

 AGT-1:
Agents will prepare Reporting Form AGT-1 in duplicate
incorporating the particulars of sale of tickets each day. In AGT-1,
the value of tickets sold on Normal and Concessional Fare basis will
be reported separately. In case tickets are voided, the reasons
therefore will be mentioned on the voided document. Such
documents will also be reported in AGT-1 with the remark 'voided'
in the "Remarks" column. Agents will also prepare sheet-wise
Summary of AGT-1.
The total number of voided coupons will also be mentioned in the
Summary of :
 AGT-1:
Agents will forward the original copy of AGT-1 to ARD on daily
basis. The audit coupons of the sold documents will be attached to
each AGT-1 sheet in the order of reporting.

 AGT-2:
Agents will prepare Form-AGT-2 in duplicate, consolidating the
bookings made during a fortnight. This form will show the value of
bookings reported through AGT-1. This form will also show the

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 amount of commission due to the agent on the bookings made
during that fortnight. Agents will forward the original copy of
AGT-2 to ARD by the stipulated dates.

 AGT-3:
Agents will prepare Form-AGT-3, in duplicate, incorporating the
particulars of refunds affected during a fortnight. Agents will
forward the original copy of AGT-3 to ARD by the stipulated dates.

 AGT-4:
Agents will prepare AGT-4 in duplicate, consolidating the net
booking reported through AGT-2 and the net refunds reported
through AGT-3. This form will also show the particulars of
Invoices/Debit Notes rose on the Agent and Credit Notes issued to
the Agent. This form will also show the net amount payable by the
agent in respect of the fortnight's transactions. Agents will forward
the original copy of AGT-4 together with copies of Credit Notes
reported in AGT-4 and a Demand Draft for the net amount due to
IAL, to ARD by the stipulated dates.

b- DISCIPLINARY ACTIONS AGAINST AGENTS:

All these forms are scrutinized and for any discrepancies, disciplinary
actions are taken against the agents. These actions are generally "legal"
but due to growing complexities of legal procedures Indian Airlines is
getting its transactions with agents insured. Thus, defaults if any are
recovered by insurance agencies.

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c- RECONCILIATION:
Another major job of the Section is to prepare concealed summary of
all the transactions by each and every agent and the total revenue
accrued. A TDS of 2.05% is to be deducted out of the commission of
the agents and to be submitted to the authority by stipulated dates. The
Agency Section is also responsible to the agents for providing the
certificate of TDS, for them to file their annual return.

d- BILLING OF CHARTER:
Charter: It is a special arrangement, whereby for an agreed operation,
the carrier places the entire capacity of an aircraft at the disposal of the
person requesting for the charter.
Fixed charges for charter are:

Airbus-320 Rs. 330,000 /hr

A-300 Rs. 550,000 /hr
Boeing Rs. 260,000 /hr

e- FOREIGN TRANSACTIONS:
For the Indian Airlines agents abroad, all the transactions are carried
through BSP with the help of IATA agent. Sale of tickets, transfer of
revenue and payment of commission to agents, everything is done
through IATA agents.

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2. SCREENING SECTION
The staff at this section performs the sequential screening or checking of all
the reporting forms and executes Interline Billing. The basic function of the
Screening Section is to screen:

a. Reporting Forms
b. Sales Records (JVs)
c. Interline Billing
d. Mail Statements recovered from outstations

a. REPORTING FORMS:
Reporting Forms are standard formats designed to report the sale of Cash
Value Documents (CVDs) that is basically the air tickets. The Reporting
Forms in use in I.A.L. are as follows:

a. Reporting Form-1: Issuance of Passenger Tickets, Excess Baggage

Tickets and MCOs
b. Reporting Form-2: Issuance of I.A.L. Air Waybills and carriage on
other airlines AWBs on IAL routes
c. Reporting Form-3, 4, 5, 6, I (Insert) & D (Delete): Adjustments
in Sundry Parties (Computerized) Accounts
d. Reporting Form-7: Outstanding Recoveries & Miscellaneous
receipts
e. Reporting Form-8: Receipts form agents

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f. Reporting Form-9 & 9A: Cash & Credit Refunds
g. Reporting Form - 10: Bank lodgment
h. Reporting Form 11 and 11A: Cash and Credit Carriage of Mail

b. JOURNAL VOUCHERS:
It confirms that the tickets are issued serially by the agents and that they
report them along with the rates charged for the service along with
details of any concession and discount offered. For any discrepancies
Debit Notes are issued to agents for the same amount.

c. INTERLINE BILLING:
Suppose a Dealer at Bangkok wants to deliver some goods to Jaipur, the
transit will be as follows:

Bangkok ----- Delhi-------Jaipur

Thus the dealer will deposit the entire sum at Bangkok and the transit of
goods from Delhi to Jaipur will be by Indian Airlines thus the Indian
Airlines will raise the Bill on Bangkok Air for the transit. This is
known as Interline Billing.

d. Mail Statement:
This is to keep a check on the weights transited as Mails and charge on
them. The various mail transits are as follows:

• State -to-State

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 • Region -to-Region
• Country-to-Country
• Speed Post etc.

Another job for the section is to keep a check on the money received for
the transactions. It need to prepare all the bank documents regarding
receipts, refunds and concealed Net Receipts and dispatch them to the
CRA or EDP along with the Bank Statements confirming the deposit in
Bank.

3. BILLS RECEIVABLE SECTION

The staff at Bills Receivable Section deals basically with the recovery of the
credit from the credit parties. Indian Airlines as its policy, even issue tickets
or provide service to certain parties on credit and Bills Receivable Section
deals with the recovery of this credit from these credit parties.

Bills Receivable Section deals with two kinds of recovery:

• Recovery from internal parties: Internal parties refer to the stations
• Recovery from the external parties: External parties refer to the credit
parties

Two sub-sections under Bills Receivable Section are:

1. Computer cell: It deals with the external parties
2. Non-Computer Cell: It deals with the internal parties

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1.Computer Cell: Indian Airlines issues tickets and provides services to
certain "credit parties" like Government Departments and big business
houses. It recovers the credit amount due from them on monthly basis.
These parties initially approach to the commercial department for the
authorization. Once the terms & conditions are signed a permanent credit
code is allotted to the party. Now with the authorization letter and the
credit party code Indian Airlines services can be availed on credit and the
bills are sent to the party directly.
Authorities to avail services are given for a fixed period known as
"Extension Period". After the extension period, bills are drawn, payment
is collected and the parties are intimated to pay. However if the party
fails to clear the bills within the stipulated time period the authority is
suspended.

2. Non-Computer Cell: The non-computer cell recovers any credit

due from internal parties, that is, the employees. The collections from
internal parties can be on account of the following:

• Credit Cargo: It is when consignor agrees to pay a booking

amount and consignee is supposed to pay the cargo/freight charges at
the destination on point of receiving the cargo. Thus, it is duty of
station manager to recover such amount.

• Issuing Recovery Section: Sometimes due to human error there

are short collections on account of booking amount on cargo or packs
at the stations. When the Screening Section identifies such short

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 collections it either asks the EDP or itself raises the bill on Station.
The Station manager follows it up and recovers the amount.

• Staff Clearance: Bills Receivable Section also recovers the

pending clearances from the staff. Non Computer Cell maintains the
records of the recovery from the employees and raise the bills on staff
accordingly which are further dispatched to the payroll Section so as
to be recovered from the salary of the employee.

[B] Expenditure Division

Expenditure Division is responsible for accounting for the expenses made in

the region. This includes expenses on salary bills, purchase of stationery
and any other administrative expenses. The division however does not book
any expenditure that is related to the aircraft in any way.

1. Bill Passing-Local

All the goods, products and equipment that are required for the day-to-day
operations by the supporting departments are purchased in bulk to be stored
in anticipation of future requirement. The Bill Passing-Local passes all the
bills regarding purchases like centralized purchasing of uniform, catering,
stationary etc. for all 5 regions.
The major functions of this section are:
a. Purchasing
b. Deductions
c. Security Deposits

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a. Purchasing: The Store & Purchase Section places the purchase
order for every local purchase (including all cash sales). Three
documents required for the purchase order are:
a) Initial proposal by vendor.
b) Invoice by seller.
c) Confirmation by Receive & Dispatch Section.

The procedure for making a purchase is as under:

Indentation by Section

Store & Purchase Section places the order

Receive & Dispatch Section receives the goods

Bill Passing-Local passes the bill

Thus the major job of this Section is to maintain records for all the
local, purchases made and to pass the bills concerned. These goods
are first brought to Delhi and then dispatched to all 5 regions as per
the requirement.

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 b. Deductions: Another important job of Bill Passing-Local is to deduct

TDS from the commission or charge paid to vendors for the labor
services provided by them. Certain goods in stores are such that they
posses the Indian Airlines logo on them for e.g. stationary, bags, tags,
folders, batches etc. Thus the Indian Airlines gets those goods printed
form the vendors. Generally Indian Airlines provides goods to the
printers and thus a TDS of 2.05% is deducted form the service charges
provided to them by Indian Airlines.

c. Security Deposit: This is the sum of amount that the vendors need
to pay as a security for the transactions with Indian Airlines. All the
vendors have to deposit a 10% amount of the order with Indian
Airlines for all catering purchases. Even for the items for printing, the
vendors are required to deposit a sum equivalent to 10% of the value
to goods or material advanced to them by Indian airlines.

2. Bill Passing-Outstation

The northern region of Indian Airlines has its dealings in 15 outstation of

which 14 are online and 1(Bhillai) is offline. Bill Passing-Outstation is the
controlling authority for these outstations. They issue advance Imprest
Cheques of a predetermined value to all the stations on weekly basis. These
cheques are always in name of Station Manager & he is the designated
person who has the authority to encash it. The Imp rest amounts for various
outstations are as follows:-

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Agra - Rs. 10,000 Amritsar - Rs.50,000
Bhopal - Rs. 20,000 Chandigarh - Rs.15,000
Gwalior - Rs. 10,000 Jammu - Rs.30,000
Jodhpur - Rs. 12,500 Khajurah - Rs.15,000
Leh - Rs. 10,000 Lucknow - Rs.40, 000
Raipur - Rs. 12,500 Bhillai - Rs.500
Shrinagar - Rs. 40,000 Udaipur - Rs.20,000
Varanasi - Rs. 35,000

The procedure by which the various stations meet their expenses is:
Issue of Impressed cheques

Station Manager gets it encashed

Meet all the expenses

Send monthly expense statement to Bill Passing-Outstation

Concerned Accounting is done

All the vouchers should come along with monthly expenditure statement and
Station Managers should sign all the Petty Cash Vouchers. Outstations can
ask for the Special Imprest Cheques whenever there is a need for meeting
extraordinary expenses. At the end of every financial year the Bank Section
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is subject to make a reconciliation Statement. Closing Balances with the
outstations should match the statement prepared by Bill Passing section.

The major expenses for outstations are:

a) Hotel Bills: for the packs offered by Indian Airlines or stay over of
packs, Cabin crew & Cockpit crew.
b) Catering Bills: for the catering services provided onboard by various
caterers like Taj Caterers, Shelf Air Catering and Ambassador etc.
c) Medical bills: Bills of all the medical facilities provided to Indian
Airlines employees by hospitals, doctors or chemists.
d) Rent: All the land with Indian Airlines is on Lease, thus a monthly
rent is given to the Leaser (owner).

3. Provident Fund

The facility for provident fund is available to any employee only after the
completion of one complete year service. A 9% p.a. rate of interest is
payable to employee on the amount in Provident Fund. The amount of
Provident Fund is calculated as follows:

Contribution to Provident Fund: 10% of Provident Fund Salary

Where Provident Fund Salary = Basic Salary + VDA + Special Allowances
(There is a provision for a Special pay or any Technical pay for engineers &
Technicians etc.)

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Employees however have the option of withdrawing the amount from their
Provident Fund if ever required. The Provident Fund amount can be
withdrawn in two ways:

• Repayable withdrawal: Withdrawal that is to be returned back

within a stipulated time span, exceeding maximum up to a period of 33
months.
 An interest of 10.5% p.a. is payable on such a withdrawal on 6

months reducing balance

 Employee can withdraw maximum of 6 times of his/her
Provident Fund salary
 Refundable withdrawal can be availed for any religious
ceremony, which an employee is incumbent to perform

• Non-Refundable Withdrawal: Withdrawal, which need not be

returned by the employee. An employee can avail such a non-
refundable withdrawal only after 15 years of service. It is available
for the following purposes:
 For the purpose of marriage of siblings or any Female
dependent
 Purchase of Land, House etc
 Construction of House- Payable in two equal installments
 Non-Refundable withdrawal is payable after completion of 15
yrs service or within 10 yr before the date of retirement.

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Income Tax is charged on Provident Fund amount as per the taxation norms
existing in the country from time to time.

4. Payroll
The staff at this section is responsible for making the salary slips of the
employees. When a person is appointed the payroll section receives his
joining letter and the various terms and conditions on which he is appointed.
The section issues the person a Staff Number. Thus every employee has a
staff number and is recognized by that.
The salary slip of the person includes basic data about the employee like the
Staff Number, Name, Designation Code, Designation, Station Code,
Department Code, Date of Birth (DOB), Date of Joining (DOJ), Bank
Account number.
Other than these details it includes Basic Pay, Dearness Allowance (DA) and
other allowances. Even if the Government increases the DA the company
does not increase it, unless decided by their various unions. Some
allowances are common to all employees whereas some vary according to
the agreements with the person.
The next items in the salary slip are the Statuary Deductions like Provident
Fund, Income Tax and Employee State Insurance (ESI). Salary slip also
includes annual salary, taxable salary, tax and rebates etc.

5. Cash & Bank Section

The staff at Cash and Bank section controls all payment and receipts relating
to the particulars region. Bank Book maintains the records of disbursement
accounts at the outstations. Cash Section deals with and maintains all the
records concerning the cash payments and Bank Section provides the
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concerned Banking treatment. It receives an advance sum of Rs. 1 crore 20
lakhs per month from the Head Quarters to meet all expenses in the region.

They are engaged in the following:

a.Payment of vouchers: They entertain and make payments for the
vouchers like Telephone Bills, Entertainment etc.
b.Salary Distribution: The cash payment of pay slips and the
corresponding accounting.
c.Advances for employees: Advancing money to the employees,
receiving back the left-out amount and accounting the same.
d.Miscellaneous Items: Maintain tenders, canteen sales, sale of scrap
etc.

Another job with the section is to handle all the cash receipts, although Bank
Section does the concerned accounting. Cash Section is required to compile
a concealed, summarized monthly report for all the expenditure incurred by
the Cash Section or all the cash payments made by it. This report is to be
forwarded to the "Finance and Budget Section" every month. The retention
period for such records is about 5 years.

6. Bill Raising & Realization:

Indian Airlines provide ground handling to various other airlines for which
they charge them. Indian Airlines has its own infrastructure, which other
small airlines lack. Thus it provides various infrastructure facilities to other
airlines on a predetermined charge. For recovering such charges due on
other airlines Bill Raising & Realization Section raise bills on such airlines.
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Thus the main job of the Section is to raise bills on other airlines for the
services provided and maintaining records for the same.

The Bureau of Civil Aviation Security under Indian Airlines provides

security to other airlines on charge basis for which similar billing is done by
Bill Raising & Realization Section. Whenever any service is provided,
corresponding handling forms like Ground Handling Form, Security
Handling Form etc. are to be filled and on basis of these handling forms bills
are raised on other airlines.

There are two kinds of parties:

a.Cash Parties: These parties are supposed to make cash/cheque/draft

payment at the time of handling only, in regard of the service provided to
them by Indian Airlines.

b.Credit Parties: These parties avail the handling services of Indian

Airlines on credit and to them. The Bill Raising & Realization Section
raises bills and receives the amount from them thereafter.

All the bills to foreign Airlines are raised and settled through IATA
clearance house. Billing for all private VIP flights i.e. chartered flights for
President, Prime Minister, Vice President, is also done by Bill Raising &
Realization Section. Bills are raised to the concerned ministries and
settlement is done thereafter.

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Indian Airlines provide all Handling & Security services to Alliance Air, its
subsidiary, for which Bill Raising & Realization Section raises the bills on
Alliance Air. These bills are booked under the head "Handling Receipt".
The revenue earned by Handling is booked in Balance Sheet under the head
"Non-Operating Revenue".

7. Finance & Budget

The staff at Finance &Budget Section is responsible for maintaining the

Journal, Subsidiary Books and General Ledger for facilitating reconciliation
of the inter-region accounts, maintaining a record of assets, providing
deprecation thereon and keeping record of deposits revived from contractor
and supplier etc. The section also compiles budget estimates and annual
accounts relating to the region, which are submitted to the Head Quarters.

The Management at the Center

The Indian Airlines follows a centralized system for revenue handling and a
decentralized system for booking of expenditures. The organization has two
head quarters for finance. One of the head quarters deals with expenditures
and is located in the Airlines House, New Delhi. The second headquarter
deals with revenue and is known as the Central Revenue Accounts (CRA).
The expenditure division is overseen by two general managers, while the
CRA has one general Manager.

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Below the headquarters are the regional offices which again have similar
structure. Here also there is an expenditure division which in case of the
Delhi region is in Palam. The revenue part is handled by an Area Revenue
Division which in case of Delhi region is in Safdarjung. Each region is
further subdivided into stations which are places where Indian Airlines has
an office.

All revenues except for those that are incidental in nature are booked by the
CRA. Incidental revenues are booked by respective ARDs. All expenses
related to the aircrafts are booked by the Head Quarters (Expenditure). All
administrative expenditures incurred in the regions are booked by the region.
The head quarters transfer a fixed sum of money to each region at prefixed
dates so that they can meet their expenses. This is called Scheduled
Transfer. If due to any reason the region needs more funds the head quarters
can transfer it by way of Special Transfer.

BUDGETING

A Budget is a detailed plan of operations for some specific future period. It

is an estimate prepared in advance of the period to which it applies. It acts
as a business barometer as it is a complete program of activities of the
business covered.
The Charted Management Accountants, London, defines a Budget as;

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“A financial and / or quantitative statement prepared prior to a defined
period of time, of the policies to be pursued during that period for the
purpose of attaining a given objective.”

The essentials of a Budget are: -

• It is prepared in advance and is based on a future plant of actions.
• It relates to a future period and is based on objective to be attained.
• It is a statement expressed in and / or physical units prepared for the
implementation of policy formulated by the management.

Different types Budgets are prepared by an industrial concern for different

purposes. A Sales Budget is prepared for the purpose of forecasting the sales
of future period. A Manufacturing Cost Budget is prepared for forecasting
the manufacturing cost. The Master Budget embodies the forecasts for-
sales and other incomes, for manufacturing, marketing and other expenses
for cash and capital requirements besides forecasting the figures of profit
and loss.

Types of Budget
There are various types of budgets, some of the important budgets are listed
below: -

SALES BUDGET:
The sales budget generally, forms the fundamental basis on which all other
budgets are built up. The budget is essentially a forecast of sales to be
achieved in a budget period. The sales manager should be made directly

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responsible for the preparation of this budget. He should take into
consideration the following factors while preparing sales budge: -
• Past sales figures and trends
• Salesman’s estimates
• General trade prospects
• Orders on hand
• Proposed expansion of discontinuance of products
• Seasonal fluctuations
• Potential market
• Availability of material and supply
• Financial aspect
• Government control, rules and regulations related to industry
• Political situation

PRODUCTION BUDGET:
This budget provides an estimate total volume of production product wise
with the scheduling of operations by days, weeks and months and a forecast
of the closing finished product inventory.
Generally the production budget is based on sales budget but in case of
companies, which find it difficult to forecast sales on account of frequent
changes in styles and fashions, it is based upon past experience. The
responsibility of Total Production Budget lies with
Works Manager and that of Departmental Production lies with Departmental
Works Manager.

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The production budget may be expressed in quantitative or financial units or
both. The objects of its preparation are: -
1. To answers the following questions:
• What is to be produced?
• When it is to be produced?
• How it is to be produced?
• Where is it to be produced?
2. To chalk down and organize the production programme for achieving
the sales target.
3. To serve as a basis for preparation of production cost budget.
4. To prepare cash forecasts.

CASH BUDGET:
A cash budget is a forecast for the cash position by time periods for a
specific duration of time. Cash forecasts may be for a short period or a long
duration. The cash budget forms an important part in coordinating efficient
working of a company. It tells about the working capital required and
available at different periods.
Main objective is: -
• Probable cash position so that excess or shortage of cash is known.
• Cash can be coordinated in relation to total working capital, sales,
investment and debt.
• A sound basis for credit and for control of cash position is
established.

FIXED BUDGET:
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A budget on the basis of standard or fixed level of activity is known as Fixed
Budget. It does not change with the level of activity. Therefore, it becomes
an unrealistic measuring yard in case of level of activity (volume of
production) actually attained does not conform to the ones assumed for
budgeting purpose. The management will not be in a position to assess the
performance of different departmental heads on the basis of budgets
prepared by them because they can serve as a measuring stick only when
actual level of activity corresponds to the budgeted level of activity. On
account of these defects of fixed budgeting, it has become a common
practice in case of concerns where sales and production cannot be estimated
accurately to give up the concepts of fixed budgeting, as it does not provide
for automatic adjustments with volume changes.

FLEXIBLE BUDGET:
A budget prepared in a manner so as to give the budgeted cost for any level
of activities is known as Flexible Budget. Such a budget is prepared after
considering the fixed, variable and semi-variable elements of cost and the
changes that may be expected for each item at various levels of operations.
Thus when budget level of activity is not attainable, flexible budget
accommodates itself to the actual level of activity, thereby; it helps in
ascertainment of costs, fixation of prices and in ascertaining performance.

REVENUE AND EXPENDITURE BUDGET:

The planning department finalizes Revenue Budget. In consultation with

other departments keeping in view the requirements of Aircrafts, Traffic
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Personnel and Feasibility of the Operation. It indicates the proposed routes
to be operated, the frequency of each route and the type of aircraft to be used
for each services. This program of operation is forwarded to all the Regions
and the department heads at the Head Quarters (HQs) for furnishing within
stipulated time their estimates for revenue Earning and Expenditure items
within their spheres.
The sources from which revenue is generated are as follows:
1- Passenger revenue
2- Pool revenue
3- Excess baggage revenue
4- Mail revenue
5- Air flight
There are number of expenditure which the company has to make in respect
of revenue earned. The company has to look after each and every expense
given to their staff. The expenditure part is controlled by cost account
section which is divided in two parts, one is at Indira Gandhi international
airport and the other one is at domestic airport. The list of all the expenses
made by company is as follows:

SURFACE TRANSPORT OPERATING COST

1. Staff carriers
2. Pool cars (including department heads ambassador pool)
3. Cars
4. Trucks
5. Jeeps
6. Station wagon
7. Maruti cars (including gypsy &vans)
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Some other operating expenses of the company are as under
1- Pay, allowances and P.F. contributions
i. Pay and allowances
ii. VDA
iii. House rent allowances
iv. Normal overtime
v. Holiday pay
vi. P.F contribution
vii. Gratuity
viii. Productivity bonus / incentive
ix. Stipend to apprentices
x. Contribution to group insurance
xi. Superannuation scheme
xii. Encashment of leave
xiii. Wages to casual labour
2- Staff and other general insurance
i. Property insurance
ii. Staff insurance
iii. Uninsured losses
3- Other staff costs
i. Travelling expenses
ii. Staff uniforms
iii. Training of personnel
iv. Other expenses of staff
4- Fuel and oil
i. Fuel
ii. Oil
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 5- Material consumed
6- Outside repair and services
7- Hire of transport
8- Other expenses
i. Rent ,Rates &taxes
ii. Electricity and water charges
iii. Printing and stationery
iv. Postage and telegrams
v. Telephones &trunk calls
vi. Maintenance of buildings
vii. Taxi hire &conveyance
viii. Hire of equipment
ix. Books ,maps & charts
x. Road tax
xi. Surface transport levy expenses
xii. Clearing & forwarding charges
xiii. Misc. expenses

The Expenditure on Revenue Account is analyzed functional grip wise

object head wise and station wise. Based on this analysis of the actual for
the previous years, the regions and departments make their assessment of the
expenses on the basis of the new program of operation and compile their
estimates for the expenditure under each detailed Head of Account in effect
from ‘Grass Root’ upwards. The regions and the Headquarters’ Accounting
Unit for Budget section at Headquarters forward these detailed estimates
supported by justification. The fuel and oil expenditure is estimated on the
basis of average consumption of fuel per flying hours on each type of
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aircraft and the proposed utilization of the aircraft as per the program of
operation. The Directors of Operation and Director of Training indicate the
crew and their training requirement in relation to their new plans of
operations. Director of Engineering assess the number of major checks and
overhaul that will fall due for the Aircraft airframes is arrived at. The
Director of Engineering, Director of Stores and Purchases and the Finance
department keeping in view price rise jointly arrives at this assessment.
While scrutinizing and compiling the budget estimates at Headquarters if
necessary, some modifications are made and at the end provisions are added
that are considered necessary and prudent and total estimates of expenditure
to be incurred during the budget period are arrived at. The broad features of
the Budget are also discussed with the Chairman and Managing Director of
the company. The final budget is then placed before the Board. After the
Board’s approval a copy of the budget estimates is given to the Government.

BUDGET AND BUDGETARY CONTROL

Indian Airlines Limited brings a very capital-intensive company, which

needs good planning, and control devices to succeed in this highly
competitive and changing aviation industry. It needs to manage its resources
optimally. For, this reason it becomes inevitable to plan for structure. It
needs to decide in advance what to do, how to do, who will do it and when
to do. In this case Budget serves as an important planning and control
device. Mostly all the concerns prepare Budget and Indian Airlines Limited
is no exception to this. Generally the budgets prepares by Indian Airlines
Limited are for one financial year. The real purpose of preparation of these
budgets is to educate the employees regarding the plan and policies of top
management, what is required of them.
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Indian Airlines Limited makes certain basic assumptions at the time of
preparation of budget, but as we know that nothing is static in this world so
there is always a possibility that the assumptions may change. This makes it
necccessary for the management to revise the budgets. For this reason
mostly two budgets are prepared for a single financial year. Firstly a budget
is prepared for the next year keeping in mind the previous year figures., but
to make budget more realistic, reliable and accurate the Revised Budget is
also prepared. This revised budget is prepared at the end of ninth month of
same year.
As management has actual figure for nine month so it is in better position to
estimate the budget for the remaining three months. The most important
advantage of preparing of revised budget is that the management is able to
reduce the variances between actual and budgeted figures.

BUDGET ALLOCATION
After the approval of the Budget estimate by the Board, it is allocated to the
regions. A part of the amount is kept at Headquarters as reserve amount.
The regions in turns reallocated the same to the department concerned the
allocation does not imply any authority as per the delegation of the financial
power is to obtain. Purchase procedure and other instruction issued from
time to time for procurement of times incurring on expenditure.

BUDGETARY CONTROL

The regions report actual expenditure incurred every month to headquarters

under various heads along with monthly targets if there is any variation. The
justifications are recorded, Budget section at Headquarters prepares monthly
report called ‘Management Information’ indicating vis-à-vis budget
138
estimates of financial as well as operational data which is re-circulated
effecting performance and are brought to the notice of the concerned
department for corrective actions. A monthly and quarterly report on key
points of financial and operational data along with justification for the
variation is sent to the Ministry of Civil Aviation.

The balance sheet regarding the sources of funds and application of funds
for the consecutive four years of Indian Airlines are as follows:

Balance sheet of IAL

PARTICULAR 2005-06 2004-05 2003-04 2002-03

S
SOURCES
OF FUNDS

1.SHAREHOLDER’
S FUNDS
a)Capital 432,13,64, 107,13,64,89 107,1364,89 107,13,64,
890 0 0 890
b)Reserves 568,51,88, 565,95,6885 566,18,34,2 562,45,28,
329 1 12 584
2.LOAN FUNDS

a)Secured Loans 313,07,50, 313,42,70,02 406,89,32,2 442,07,22,

475 8 39 950
b)Unsecured 26,34,80,0 118,57,44,56 283,90,09,9 723,59,19,
Loans 38 1 40 091
Total 1340,07,83 1105,09,48,3 1364,11,41, 1835,25,35
,732 30 281 ,515
APPLICATIO
N OF FUNDS

1.FIXED ASSETS
a)Gross block 5513,52,55 5496,99,73,2 5458,73,84, 5477,42,27
618 60 150 ,008
b)Less: 4219,8177, 3931,82,02,8 3665,83,30, 3385,90,93

139
 Depreciation 348 19 015 ,466
c)Net Block 1293,70,78 1565,17,70,4 1792,90,54, 2091,51,33
,270 41 135 ,542
d)Cap. wk in 4,39,98,10 12,62,23,881 3,69,40,066 7,52,98,98
proges 6 5
2. INVESTMENTS 2,98,46,52 2,92,31,604 2,92,97,192 2,87,96,91
1 5
3.CURRENT
ASSETS LOANS
AND ADVANCES

a)Inventories 98,53,63,4 98,67,81,523 117,00,61,8 120,88,86,

14 28 532
b)Goods-in- 19,43,63,8 17,79,47,855 27,61,35,37 19,25,09,8
Transit 73 5 73
c)Sundry Debtors 989,91,79, 874,09,06,10 693,26,95,7 760,15,82,
167 7 12 271
d)Cash & Bank 309,30,22, 82,86,58,227 101,26,95,8 73,15,23,7
Bal. 547 37 02
e)Other Current 15,98,28,1 18,00,49,040 19,61,35,15 20,40,74,8
Assets 16 7 13
f)Loans and 480,50,77, 294,68,71,33 253,95,36,3 271,39,92,
Advances 073 5 52 055
Less: CURRENT
LIABILITIES AND
PROVISIONS
a)Liabilities 2410,41,72 2375,34,86,8 2279,36,15, 2237,14,15
,699 96 130 ,088
b)Provisions 421,53,53, 493,15,85,21 441,14,64,9 411,64,27,
124 5 65 613
( NET CURRENT (918,26,91, (1482,38,58, (1507,78,19 (1383,52,7
ASSETS) 633) 004 ) ,834) 3,455)

4.MISCELLANE Nil Nil Nil 32,40,145

OUS
EXPENDITURE(
deferred
revenue
expenditure)
5.PROFIT 957,25,52, 1006,75,80,4 1072,36,69, 1116,53,39
&LOSS A/C 468 08 722 ,383
TOTAL 1340,07,83 1105,09,48,3 1364,11,41, 1835,25,35
,732 30 281 ,515

The analysis can be easily done by seeing the profit and loss account
because since 2002-03 the profit and loss account has a decline in its value.

140
As compared to 2002-03 the company has fewer sources of funds in the year
2005-06. Also if we see the net current asset of the company, the company
has less net current asset in year 2005-06 as compared to the 2002-03, 2003-
04 &2004-05.

COST ANALYSIS
Profit & Loss account of IAL:

PARTICULARS 2005-06 2004-05 2003-04 2002-03

I. REVENUE
OPERATING
Traffic revenue 5307,78,84,0 4951,32,91,1 4309,94,84,9 3824,57,79,6
03 93 82 37
Incidental 458,21,84,16 381,78,90,95 339,85,62,13 247,14,47,95
revenue 7 9 9 0

141
Total operating 5333,11,8 4649,80,4 4071,72,2
revenue(a) 5766,00,6 2,152 7,121 7,587
8,170
Non operating 22,81,47,4 29,44,63,0 75,86,61,4 42,51,24,8
revenue 07 72 61 72
Total revenue(b) 5788,82,1 5362,56,4 4725,67,0 4114,23,5
5,577 5,224 8,582 2,459
II. EXPENSES
OPERATING
Employees’ 1140,83,87,7 1215,19,90,3 1154,28,95,2 1073,76,25,9
remuneration &benefits 75 99 96 22
Insurance 82,40,72,649 99,20,77,888 138,85,66,81 169,21,79,78
5 7
Fuel &oil 1965,65,26,6 1490,94,05,6 1039,99,79,4 956,18,56,63
98 03 15 9
Landing, parking 301,67,55,39 282,45,59,62 255,21,19,90 268,82,43,37
&navigational 9 0 8 4
Material 419,06,25,82 565,26,85,88 448,79,00,52 336,29,20,99
consumed(aircraft) 2 4 9 1
Outside repairs(aircraft) 277,01,80,31 301,27,33,33 299,82,33,68 254,24,79,87
2 6 2 2
Hire of aircraft 180,14,15,49 138,86,41,37 112,85,19,43 96,09,47,902
5 2 7
Booking agency 334,33,73,01 301,27,63,12 252,52,33,50 260,58,17,08
commission 9 1 4 1
Depreciation 297,09,42,29 300,00,39,87 306,18,23,36 317,94,14,56
7 5 2 9
Food services &other 188,46,57,92 151,38,38,11 131,05,25,76 126,93,71,37
pax amenities 4 4 5 9
Provision for bad debts 2,37,00,000 NIL 3,27,00,000 Nil
Provisions for 48,12,00,000 27,30,00,000 20,95,00,000 6,30,00,000
obsolescence of spares
Other operating 453,01,68,54 397,90,22,81 360,90,22,21 340,06,25,77
expenses 3 0 6 9
Total operating 5690,20,0 5271,07,5 4524,70,1 4206,44,8
expenses(c) 5,933 8,022 9,929 3,295

Non operating 23,85,20,8 34,72,29,9 69,51,26,7 104,71,15,

expenses 93 41 56 056
Prior period adjustments 11,76,60,811 (14,84,32,053 83,28,92,236 (36,32,650)
(net) )
Total expenses(d) 5725,81,8 5290,95,5 4677,50,3 4310,79,6
7,637 5,910 8,921 5,701
Operating profit/ 75,80,62,2 62,04,24,1 125,10,27, (134,72,55
loss(a-c) 37 30 192 ,708)

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Net profit/loss(b-d) 63,00,27,9 71,60,89,3 48,16,69,6 (196,56,13
40 14 61 ,242)
Provision for FBT 8,50,00,00 NIL Nil Nil
0
Provision for 4,98,00,00 6,00,00,00 4,00,00,00 Nil
taxation(MAT) 0 0 0
Provision for 2,00,000 NIL Nil Nil
wealth tax
Net profit/loss(after 49,50,27,9 65,60,89,3 44,16,69,6 Nil
tax) 40 14 61
Brought forward (1006,75,8 (1072,36,6 (1116,53,3 (919,97,26
(loss) 0,408) 9,722) 9,383) ,141)
Balance carried to (957,25,52 (1006,75,8 (1072,36,6 (1116,53,3
balance sheet ,468) 0,408 9,722) 9,383)

The company has a operating revenue of Rs 5766.01crs in the year 2005-06

which is high as compared to next consecutive five years. Also operating
expenses has a high value in the year 2005-06 as compared since 2002-03.

The company has the net current asset of Rs 1913.68 crs in the year 2005-06
which is quite high as compared to other consecutive five years but the
current liabilities for the company is low in 2005 -06 as compared to 2004-
05 but it is high as compared to other years. The company has a net working
capital of Rs 918.27crs which is low in 2005-06 as compared to other
consecutive four years.

FINDINGS AND LIMITIONS

SWOT ANALYSIS
For a country of continental size like India, a strong, reliable and efficient
Civil Aviation Sector goes a long way in promoting and sustaining tourism.
Indian Airlines being a leader in this industry cannot operate in a vacuum. It

143
needs to keep its eyes and ears open to survive in the liberalized economy of
our country, which has paved a way for any private airlines to operate along
with it. The internal and external environments contain various strengths,
weaknesses, opportunities and threats which need to be identified well in an
advance to take care of various situations that may arise from time to mime.
We shall now try to focus on the above mentioned factors in context with
present scenario one by one.

STRENGTHS

Infrastructural Support: The most notable strength of Indian Airlines

Limited is its vast infrastructural support built over five decades. This has
helped it reduce its costs and at the same time increase its efficiencies. The
most notable among its infrastructure are the Central Training Establishment
(CTE) and Jet Engine Overhaul Complex (JEOC).

Fleet’s Strength: Indian Airlines Limited is one of the largest domestic

airlines in the world and is equipped with modern fleet of Airbus A-300, A-
320, Dornier, ATR-42 and Boeing 737 Aircraft. As compared to the fleet of
Indian Airlines Limited, the total fleet of all private airlines combined
together is smaller than that of Indian Airlines Limited. This clearly shows
the superiority of Indian Airlines Limited over this factor.
144
Vast computerized Network: Each of the 55 domestic stations of Indian
Airlines Limited is linked over a computerized network, which provides
instant reservations and up to date information of each station instantly.
This is no doubt a great achievement, which proves that Indian Airliner
Limited has realized its potential.

Largest Network: Indian Airlines Limited Over the last 50 years, Indian
Airlines has built up a reliable and stable schedule that links 75 destinations
- 57 within India and 20 abroad. From the gateway cities of Delhi in the
north, Mumbai in west, Kolkata in the East and Chennai in the South, the
passenger can take off in an Indian Airlines Limited is within easy reach. In
comparison of this each private airlines operate it maximum of 30
Destinations, which is no ways near the 75 Destinations, which is no ways
near the destinations provided by.

Most Modern Fleet: Indian Airlines Limited has been regularly updating
its fleet. Having started Vikings and Dakotas it now has Airbus A-320s, the
modern aircrafts having a technology of fly by wire and is now in the
process of phasing out Boeing 737 aircrafts.

Maintenance Facilities: In aviation industry, maintenance plays a vital

role. It is the backbone of an organization and no organization can survive
unless and until it has good maintenance facilities. Indian Airlines Limited
has understood this very well and has maintenance facilities in Delhi,
Hyderabad and Kolkata. The engineers are well qualified and hold a

145
reputation of being one of the best in the aviation industry. Private airlines
are quite dependent upon their foreign collaborations or the Indian Airlines
to maintain their aircrafts, which is a costly affair.

Highly modernized Central Training Establishment (CTE,

Hyderabad): CTE was established as a profit center by Indian Airlines. It
provides training in all aspects of Airlines Management both for personnel
of Indian Airlines as well as to representatives of other airlines as per
DGCA, IATA, and ICAO. It has been regarded as the best training facility in
India and is responsible for providing expert training facilities to Air India,
Blue Dart, Alliance Air. Air Sahara, Sri Lankan Airlines etc.

WEAKNESSES

Lack of personalized and customer friendly services: This is one of

the major findings of our study. Almost all passengers feel that Indian
Airlines Limited staff needs to be more customers friendly and professional
in its approach. In services industry, it is the kind of services that one
provides matters and leaves its impression in the mind of passengers. It

146
infact is a measure of quality of the product. Indian Airlines Limited needs
to take immediate steps in this regard to change the public opinion.

Overstaffing: As mentioned earlier the total staff strength of Indian

Airlines Limited is 18715 as on date. On the average 19300-19500 people
travel on Indian Airlines Limited on its 112 flights daily. It records three
hundred departures per day (including Alliance Air). This means that there
is roughly about one staff recruited against every passenger traveling. This
is no doubt a bad sign. Indian Airlines Limited has understood this
weakness now and hence has not made any major recruitment for last few
years. Moreover, there are around two thousand employees retiring within
next two years which will trim work force automatically.

Under Utilization of Capacity: Indian Airlines Limited sells space,

which is highly perishable. This is because idle capacity would imply
opportunity lost. Capacity means the total number of seats offered by Indian
Airlines Limited daily to its passengers. It has been observed that Indian
Airlines Limited offers around 32000 seats daily where as on average 19300
seats are utilized meaning an average seat factor of about 60%. It is
imperative to improve upon the situation before it is too late. More
marketing efforts are required to attract larger passenger

OPPORTUNITIES

147
Growth of Aviation Industry: The recession in the West, the Gulf Wars,
Surat Outbreak and Kargil War have slowed tourist growth and
consequently affected the Indian Airlines Limited revenues. However, these
were transient setbacks as has been proven by recovery of global tourist
activity. Aviation industry is growing at the rate of 10% per year. This is no
doubt a good sign. And Indian Airlines Limited must exploit this
opportunity and take maximum benefits out of it.

Operating on International Routes: Earlier Indian Airlines Limited was

not allowed to operate on international sectors, as Air India took care of it.
With the liberalization of Indian economy, Government of India gave Indian
Airlines Limited a green signal to operate in the international routes. It is
always economical to operate on long routes and it is only by this attraction
Indian Airlines Limited has branched out to operate on 17 international
sectors.

Profits after a long time: Indian Airlines Limited had been running in red
from the year 1989-90 to 1996-97 for a number of reasons. It started earning
profit in 1997-98. It earned a profit of Rs. 47.27 crore in 1997-98, Rs. 14.17
crore in 1998-99 and Rs. 51.42 crore in 1999-00. But after that it again
started making losses with a loss of Rs. 159.14 crore in 2000-01. It remained
in red in 2001-02 with a loss of Rs.246.75 crore followed by a loss of Rs.
196.56 crore in 2002-03. Then it came in black once again in 2003-04 with a
net profit of Rs. 44.17 crore and till then it has increased in the profit after
tax only Rs 5.33crs which is Rs 49.50crs in the year 2005-06. And again

148
Creation of profit centers: Due to its size Indian Airlines Limited is
unable to be as nimble as it ought to be in term of decision making, customer
service and employee motivation. Consequently, an integral part of its
strategy was to hype off certain activities into separate profit centers, to
make them more focused, flexible and accountable. It was with this in mind
that Indian Airlines Limited created the following profit centers:
• Central Training Establishment
• Jet Engine Overhaul Complex
• Alliance Air
• Ground support
• Cargo
• Auxiliary Power Unit
• Engineering
The profit centers have already made useful contribution in the improved
performance of Indian Airlines Limited.

OTHER OPPORTUNITIES: the company stands to benefit from a

variety of other opportunities due to its inherent strengths and emerging
market trends. Some of these advantages are listed below:
• Good domestic market growth potential in the event of upturns in the
domestic market
• Synergy between domestic and international operations
• Modern engineering infrastructure and highly skilled manpower
• Revenue potential from handling services rendered to other airlines

149
THREATS
Competition Itself: Ever since the inception of Indian Airlines Limited it
had never tasted competition, as it was a protected monopoly. When the
private airlines entered this field there was a panic in Indian Airlines
Limited, instead of thinking of ways to tackle, it stated condemning the
Govt. Policy and thought it as threat to it existence. It is only recently that it
has realized that Private Airlines were here to stay.

Instability in the Polices of India: For the last 4 of 5 Years there has
been a great uncertainty in the polities of India. Since majority of Indian
Airlines Limited polices requires the approval of Govt. Hence an
uncertainty in the political circle hinders the decision making of Indian
Airlines Limited. Every Govt. has its own perception about aviation industry
resulting in the change in the policies under short intervals. This not only
results in the low moral of the management but also makes it indecisive
which is not good for an organization.

RATIO ANALYSIS

By the help of ratio analysis we highlighted the content and importance of

the statements of changes in financial position (Funds and Cash Flow
statement). Management, creditors, investors and others to form judgment
about the operating performance and financial position of the firm use the
information contained in these statements. Users of financial statement can
get further about financial strengths and weakness of the firm if they
properly analyze information reported in this statement. Management
should be particularly interested in knowing financial strength of the firm to

150
make there best use and to be able to spot out financial weakness of the firm
to take suitable corrective action. The future plans of the firm should be laid
down in view of the firm’s financial strengths and weakness. Financial
analysis is the starting point of making plans, before using any sophisticated
forecasting and planning procedures. Understanding the past is a
prerequisite for anticipating the future.

We have calculated the following ratios:

LIQUIDITY RATIOS:

1. Current Ratio
2. Quick Ratio

LEVERAGE RATIOS

1. Debt Equity Ratio

ACTIVITY RATIOS

1. Debtors Turnover Ratio

2. Fixed Assets Turnover Ratio
3. Inventory Turnover Ratio
4. Current Asset Turnover Ratio
5. Working Capital Turnover Ratio

PROFITABILITY RATIOS

1. Operating profit ratio

2. Net Profit Ratio
151
 3. Return on equity
4. Return on Investment

Current Ratio:

The current ratio is the ratio of total current assets to current

liabilities. It is calculated by dividing current assets by current liabilities.

Year 2003-04 2004-05 2005-06

Current Ratio 0.446 0.45 0.675

Current Ratio
0.8

0.7

0.6

0.5

0.4 Series1

0.3

0.2

0.1

0
2003-04 2004-05 2005-06
Current Ratio is considered satisfactory if it is 2:1. If the value of current
assets becomes half, the organization will be able to meet its obligation.
After analyzing the values we have found that current ratio of Indian
Airlines is increasing but it is not quite satisfactory to meet its liability
means the availability of current assets in rupees is not able to make one

152
rupee for current liability, but as compared to other years the ratio is
increasing which indicate good result in future.

QUICK RATIO:

Quick ratio refers to current assets which can be converted

into cash immediately or at a short notice. The quick ratio is the ratio
between quick current assets and current liabilities and is calculated by
dividing the quick assets by current liabilities.

Years 2003-04 2004-05 2005-06

Quick 0.408 0.42 0.641
Ratio
Quick Ratio
0.7

0.6

0.5

0.4
Series1
0.3

0.2

0.1

0
2003-04 2004-05 2005-06

It shows the liquidity position of company in this case the ratio is increasing
but it is not satisfactory. The company has to pay its all current liabilities

153
because it can’t sell its inventories. But as per increasing graph it will show
best results in future.

Inventory Turnover Ratio:

Years 2003-04 2004-05 2005-06

Inventory 36.835 54.04 58.5
Turnover Ratio
Inventory Turnover Ratio
70

60

50

40
Series1
30

20

10

0
2003-04 2004-05 2005-06

It indicates that how quickly the inventory is sold. High ratio is always
better than low ratio as it shows good inventory management. Low ratio
adversely affects the ability to meet customer demand which is bad for
company’s image. But here in our case the ITR is increasing in the last three
years, it shows that IA ltd. is doing job in providing good quality services
and meet its customer’s demand. The ITR is increasing due to increase in
sales and current assets meets its current liability.

Net Working Capital:

154
Years 2003-04 2004-05 2005-06
Working Capital -2.858 -3.27 -6.28
Turnover Ratio
Working Capital Turnover Ratio
0
2003-04 2004-05 2005-06
-1

-2

-3
Series1
-4

-5

-6

-7

Net working capital is computed by dividing sales by Net working capital

here the ratio is declining year by year the reciprocal of the ratios are.

Years 2003-04 2004-05 2005-06

-0.34 -0.30 -0.16

It indicates that for sale of Rs 1/- the company needs worth current assets
which are currently short by -0.16 and as per the trend it has improved. IA
has increased its current assets from the past three years.

Collection Period:

Years 2003-04 2004-05 2005-06

Collection Period 1.96 1.8 2
155
 Average Collection Period
2.05

1.95

1.9
Series1
1.85

1.8

1.75

1.7
2003-04 2004-05 2005-06

It indicates the quality of debtors and the promptness of their payment. Here
the collection period has increased which indicates that the collection is
more delayed.

Thus the chances of bad debts are also increased i.e. Vayudoot Ltd. a
subsidiary company of Indian Airlines owes 10 crore but is fully doubtful.
The increase in debt collection period from 1.8months to 2 months may be
due to change in the economic conditions and /or laxity in managing
receivables.

Return on Equity:

Years 2003-04 2004-05 2005-06

Return on Equity 6.56 9.75 4.94

A return on shareholders equity is calculated to see the profit ability owner’s

investment it indicated how well the firm has used the resources of owners.

156
 Return On Equity Ratio
12

10

6 Series1

0
2003-04 2004-05 2005-06

In this case Rate on Equity has increased in 2004-05 due to high net profits
but it has sharply declined in 2005-06 to 4.94 due to decline in net profits
and also increase in net worth it also indicated that the owner’s resources are
not optimally utilized to its potential.

Return on Investment:
Years 2003-04 2004-05 2005-06
Return on 7.79 4.7 4
Investment

157
 Return On Investment Ratio
9
8
7
6
5
Series1
4
3
2
1
0
2003-04 2004-05 2005-06

It explains the relationship between EBIT (net of taxes) and Total Assets.
ROI has sharply declined due to decline in EBIT, after 2003-04.
It shows that the investment is not yielding a satisfactory return due to
increase in expenses and decline in EBIT.

Debtors Turnover Ratio:

Year 2003-04 2004-05 2005-06
Debtors 6.70 6.10 5.8
Turnover Ratio

158
 Debtor Turnover Ratio
6.8

6.6

6.4

6.2

6 Series1

5.8

5.6

5.4

5.2
2003-04 2004-05 2005-06

The higher the value of DTR the more efficient is the management of
credits. The ratio has declined from last year to 5.8 this indicates that IA is
not able to manage its credits efficiently.
It has to concentrate upon the collection policies and debt collection period.

Fixed Asset Turnover Ratio:

Year 2003-04 2004-05 2005-06

Fixed Assets 2.588 3.3 4.4
Turnover Ratio

This ratio shows the firms ability in generating sales from all financial
resources committed to Total Assets. It is calculated to know the utilization
of fixed assets.

159
 Fixed Asset Turnover Ratio
5
4.5
4
3.5
3
2.5 Series1
2
1.5
1
0.5
0
2003-04 2004-05 2005-06

In this case the FATR of IA is increasing compared to last year which

indicates more and more utilization of fixed assets. Here IAL, to generate a
sale of Re 1/- needs Rs 0.22/- which is less than the previous years i.e. 0.29
and 0.38.
It shows that the company is improving and would give good results.

Current Assets Turnover Ratio:

Year 2003-04 2004-05 2005-06

Current Assets 3.544 4.886 3
Turnover Ratio

This ratio shows the firms ability in generating sales from all financial
resources committed to current asset. It shows the utilization of current
assets.

160
 Current Asset Turnover Ratio
6

3 Series1

0
2003-04 2004-05 2005-06

Herein the CATR is decreasing as compared to last year which shows less
utilization and lack in management of asset the decrease in ratio shows the
current asset required more time to convert in cash.
Herein IAL, to generate a sale of Re 1/- needs Rs0.33/- which is quite more
than last two year Re 0.25/- it shows current asset required more time for
sale which is bad for companies Goodwill. It increases the chances of bad
debts.

Net Profit Ratio:

Year 2003-04 2004-05 2005-06

Net Profit Ratio 0.94 1.23 0.85

161
 Net Profit Ratio
1.6

1.4

1.2

0.8 Series1

0.6

0.4

0.2

0
2003-04 2004-05 2005-06

Net Profit Ratio indicate management efficiency in manufacturing,

administration and selling the products this ratio is the overall measure of
firms ability to turn each rupees sales into net profit. It also indicates the
firm capacity to withstand adverse economic condition.
The NPR of IAL has declined sharply in 2005-06 it is due to the increasing
operating expenses it has to focus on increasing its NPR as it would really be
difficult to a low net margin firm to withstand the adversities i.e. declining
demand etc.

Debt Equity Ratio:

Year 2003-04 2004-05 2005-06

Debt Equity 1.025 0.64 1.34
Ratio

162
 Debt Equity Ratio
1.6

1.4

1.2

0.8 Series1

0.6

0.4

0.2

0
2003-04 2004-05 2005-06

This ratio describes the lenders contribution of the owner’s contribution.

Debt equity ratio of 1.34 indicates that the lenders have contributed more
funds than owners. This ratio is satisfactory for the company as the ideal
ratio is 1:2.

163
Comparative Analysis between Jet Airways and Indian Airlines

Current Ratio:

Indian Airlines Jet Airways

0.675:1 1.61:1

Current assets can be converted into cash more rapidly than current
liabilities in the Jet Airways.
The Current Ratio of Jet Airways is very near to the ideal ratio of 2:1 i.e.
very good for the company. But, on the other hand Indian Airlines has very
weak current ratio as its current liabilities are more than the current assets.
Margin of Safety of Jet Airways is more than that of Indian Airlines.

QUCIK RATIO:

Indian Airlines Jet Airways

0.641:1 2.31:1

The liquidity position of Jet Airways is very sound as compared to Indian

Airlines.
Jet Airways can suffer from shortage of funds if it has slow paying doubtful
debts and long duration outstanding debtors.
On the other hand, Indian Airlines is really prospering & paying its current
obligation in time if it has been turning over its inventories efficiently.
Inventory Turnover Ratio:

Indian airlines Jet Airways

58.5:1 15.43:1

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The ITR of Indian Airlines is quite high as compared to Jet Airways. It is
nearly four times to the ITR of Jet Airways.
It indicates that Indian Airlines is very good at inventory management. It
also shows good liquidity position of the company. It is also good at
providing good quality services and meeting its customers demand.
Jet Airways should concentrate upon meeting customer demand otherwise it
would adversely affect position of the company.

Debtors Turnover Ratio:

Indian Airlines Jet Airways

5.8:1 16.61:1

The high Debtor Turnover Ratio of Jet Airways indicates that it is very
sound at managing its credits efficiently.
Jet Airways is good at collection policies. It has a shorter time lag between
the credit and collection period. The Debtors Turnover Ratio of Jet Airways
is 3 times higher than Indian Airlines as it is 3 times efficient in collection of
debt.

Fixed Asset Turnover Ratio:

Indian Airlines Jet Airways

4.44:1 1.24:1

As Fixed Asset Turnover Ratio of Indian Airlines is higher than Jet Airways,
it needs less of fixed assets i.e. for generating a sale of rupee one Indian

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airlines need 0.22 of fixed assets whereas Jet Airways need 0.80 of fixed
assets.
This indicates that Indian Airlines is utilizing its fixed assets more
efficiently as compared to Jet Airways.

Current Asset Turnover Ratio:

Indian Airlines Jet Airways

3:1 1.40:1

As current asset Turnover Ratio of Indian Airlines is higher than Jet

Airways, it needs less of current assets for generating sales of one rupee.

Debt Equity Ratio:

Indian Airlines Jet Airways

1.34:1 2.02:1

The debt equity ratio indicates that the lenders contribution is more than the
owner’s contribution in both the companies.
Jet Airways is a high-levered firm as compared to Indian Airlines. These
shows there are higher financial risk in Jet Airways as compared to Indian
Airlines.

Return on Investment:
Indian Airlines Jet airways

4:1 10.9:1

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The higher return on investment is 10.9 which are more than double as
compared to Indian Airlines. Which indicate the fact that, the EBIT of Jet
Airways is much higher than Indian Airlines though the fixed assets are less.
This also shows that Jet Airways is earning good return on its investment as
compared to Indian Airlines.

Return on Equity:
Indian Airlines Jet airways
4.49:1 12.61:1

This ratio indicates that profitability of owner’s resources is much more in

Jet Airways as compared to Indian Airlines. Higher ROE of Jet Airways
indicate that how well the firm has used the resources of owner. Jet airways
are meeting its objective of earning a satisfactory return. Jet Airways has
comparatively more opportunity of attracting of future investment.

Collection Period:
Indian Airlines Jet airways
2 months 0.72

The average collection period of Jet Airways is less than that of Indian
Airlines, it indicates that the collection policies of Jet Airways are very
efficient as compared to Indian Airlines.
The collection policy of Jet Airways is very tight which cut shorts the
chances of bad debts losses but on the other hand Jet Airways has very
restrictive credits and collection policy. On the other hand, the collection

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policy of Indian Airlines is very liberal as it has very inefficient credit and
collection performance.

Operating Profit Ratio and Net Profit Ratio:

Indian Airlines Jet airways

1.31%/0.85% 24.13%/7.93%

Jet Airways is converting each rupees sale more efficiently than Indian
Airlines into net profit. Jet Airways is managing better return on
shareholder funds as because of high net operating margins while Indian
Airlines is failing on this ground.
It would be advantageous position for Jet Airways to survive in the face off
falling selling price rising COP or decline in demand also it would be really
difficult for Indian Airlines to withstand such adversities.
Jet airways are able to accelerate its profit at a faster pace than Indian
Airlines. The sales turnovers of both the firms are equal but the operating
expenses of Indian airlines are higher than Jet Airways and on the other hand
the resultant net profit of Indian Airlines is quite low as compared to Jet
Airways.

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 SUGGESTIONS AND RECOMMENDATIONS

As the findings in the study are found not to be satisfactory towards the
training procedures, the following suggestions and recommendations are
made to improve the existing training system in the organization:

1. The training programs for the employees should be conducted very

frequently on a quarterly basis, where the skills of the employees should be
analyzed with regards to his role, and appropriate training program should
be suggested.
2. Apart from this, the employees should be carefully monitored about the
development of his skills, and the difference in the productivity to the
organization should be measured.
3. The duration of the training program should be extended so that the
employees are more benefitted from the training programs imparted to them.
4. The monitoring of the employees needs to be done very frequently as this
could give a clear view about the achievement of the tasks assigned to the
employees which could further assist in designing appropriate training
programs for them. This can be done through daily or weekly reports which
describe the amount of work done, and each employee is supposed to report
to his or her immediate superior.
5. The sharing of knowledge, information and technologies with other
organization provides a fair chance to develop the organization keeping it
updated with the rapid changing scenario.
6. Training needs to be integrated with performance management. Training

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should be based on need analysis and there should be a feedback and
measurement of post training performance.
7. Training programs should be more informative and assessment should be
regularly done.
8. Also it is suggested that training programs should be conducted mostly
outside the workplace and these programs should be coupled with refresher
courses.
9. A majority of the training programs for the employees should be
conducted while they are on the job so that they are able to have a more
practical knowledge of their job profile.
10. It has been observed that the training programs are completely diverse
from the job profile. It is suggested that the training programs should be
more job profile oriented so that it helps the employees in improving their
job performance.
11. It has also been observed that the trainers to some extent are not aware of
the needs of the employees. Thus, it becomes necessary that more training
should be imparted to trainers also so that they are more effective when they
are imparting training.
12. The management of the organization should educate the employees on
how to improve their working capability to be more effective.
13. The trainees should be evaluated at the end of the training programs to
know the effectiveness and shortcomings of the training programs.
14. A better infrastructure support is also recommended for imparting the
training to the employees. More of the LCD projectors, OHPs and slides
should be used in order to make the program more effective.
15. Proper follow ups should be performed to judge the effectiveness and to
provide any assistance needed at the time of actual working, especially in
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cases of “off the job training”.
16. More and more opportunities should be given to the employees so that
they can incorporate their learnings from the training programs in their
routine work.
17. There should be a pre training and post training evaluation of the
employees so as to ascertain the changes and to know how much the
employees have been able to grasp during the training.
18. There is an inbuilt resistance among the employees to attend the training
programs. Therefore, the employees should be motivated to voluntarily
attend the training programs. Also memberships with some professional
institutions should be strongly encouraged.
19. There is a practice of nominating the employees for the training
programs. The nomination is done by the superiors randomly. This
nomination should be done keeping in mind the training needs of the
employees and only those employees should be nominated who are
interested to attend the training.
20. More emphasis should be given to presentations, role playing,
discussions etc. while imparting training rather than lectures, seminars etc.
21. Also the classrooms should be more ventilated in order to provide a
learning atmosphere to the trainees.
22. The practical aspect of knowledge should be given more emphasis rather
than the theoretical aspect.
23. The training procedure currently in place in the organization was set up
way back in the year 1953. Therefore, the training procedure needs to be
changed as per the changing needs of the business scenario.
24. As most of the departments are still using manual records for the
employees, computer based database management systems are suggested to
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maintain the records which can be helpful in implementing software based
analysis. More and more computers, projectors and other equipments needs
to be installed to assist the trainers as well as trainees.
25. Also more and more refresher courses should be conducted apart from
training programs so as to keep the employees in good stead.
26. Managers and employees should be given freedom to an extent to make
decisions, innovations, creating new ideas, working styles and suggestions in
order to improve the productivity and performance, and such employees
should be rewarded to motivate them to come up with more exhilarating
ideas.
27. There is a need of complete re work of the training practices in line with
the modern methods.
Indian Airlines problems can be stated in just one phrase- “Negative
NetWorking Capital”. All recommendations discussed here relate to
findingsolution to this problem. The basic aim of these recommendations is
not to help Indian Airlines achieve a positive net working capital but to help
it attain zero net working capital.

1. Improving Collection and Payment Periods:

The company should aim at reducing its collections period to around 25

to 30 days while bringing the payment period down to 35 to 40 days over
the next three years. This will help it in increasing its debtor turnover
resulting in a decrease in the collection period and increase in the
availability of the funds with the organization. At the same time a fall in
payment period will improve the working capital position of the
company. Thus Indian Airlines would be able to decrease its creditors to
a great extent and at the same time improve its creditworthiness.
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 2. Raising Long Term Funds:

The company should raise long term funds either by issuing shares or
debentures or any other long term credit. It may also raise debt by
issuing External Commercial Borrowings (ECBs). As the rate of interest
is lower in Japan, European Countries and America, it can raise low cost
long term debt to partly replace the current liabilities that are being used
to finance the fixed assets. Other than ECBs shares and debentures are
also sustainable sources of long term finance.

3. Increasing investments in marketable securities:

Indian Airlines can cover a part of the increased financing costs
due to resorting to long term finance by investing a part of its funds in
short term marketable securities. This will serve the dual purpose of
having productive and yet liquid funds. For more profitable short term
funds Indian Airlines can form a special team of investment managers
who can manage both the long term and short term funds.
Moreover a large part of the current liabilities of the company are due to
uncollected salaries of the employees. Though most of the salary payments
in Indian Airlines Are done by the Electronic Clearance System (ECS)
facilitated by Reserve Bank of India (RBI), yet there are some employees
who due to different reasons cannot or do not opt for the ECS. Their reasons
can be high mobility like in case of a pilot or unavailability of the facility
which is the case for employees in some outstations. These employees get
their salaries manually. When their salaries remain uncollected the company
writes them as a current liability in its books. The company should invest

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the amount of these uncollected or unclaimed salaries in short term
marketable securities. This will ensure that the amount of these uncollected
salaries does not remain unproductive and at the same time it does not affect
the working capital position of the company.

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 Conclusion

Indian Airlines is the largest domestic carrier in the world in terms of fleet
strength. Right now celebrating fifty years of operations, it has seen both the
ups and downs of the industry. It has faced losses and made gains. In this
fiftieth year of its operation, it has been riding on the back of an efficient
management to earn profits after facing losses in the past few years.
It had adopted a negative working capital so as to bolster its profits and
managerial efficiency. Today, financial managers round the world do not
consider it wrong for a company to have negative working capital.
However, the evils of illiquidity in the short term are too dangerous to
overlook. Thus, it is always better to take up zero working capital rather
than negative working capital as a policy. This not only helps the company
to increase its efficiency in managing its funds but also gives the company
enough liquidity in the short term to overcome the short term liquidity
problems. The report does not foresee any liquidity problem for the
company in near future. However a company must prepare itself such that it
does not face any problem even in the worst case scenario.

BIBLIOGRAPHY
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INTERNET
 www.indian-airlines.nic.in

History
01-07-08
 WWW.GOOLE.CO.IN

21-06-2008

JOURNALS/ MAGAZINES
 Budget 2006-07
 Annual Report 2005-06
 Annual Report 2006-07
 Revenue and expenditure budget 2006-2007
 Monthly issues of Air India for the month November’07,
December’07,January’08, February’08, March’08, April’08,
May’08

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