HISTORY OF AIR INDIA

J. R. D. Tata founded Tata Airlines in 1932 as a division of Tata Sons Ltd. (now Tata Group). After World War II in 1946, regular commercial service was restored in India and Tata Airlines became a public limited company under the name of Air India. Under the Air Corporations Act of 1953, the Government nationalized the air transportation industry and Air India International Limited was born. In 1960, Air India flew its first international flight to New York via London. In 1962, Air India became the world's first all-jet airline and its name was officially truncated to Air India. Services to Shanghai and to Air India's third US gateway at Newark Liberty International Airport in Newark were introduced in the year 2000.

In 2007, Air India and Indian Airlines merged into one airline, with its name remaining Air India. Air India is now a part of Star Alliance and is supposed to be joined by Alliance Air and Air India Express soon. On 1 March 2009, Air India had made Frankfurt Airport at Frankfurt am Main as its international hub for onward connections to United States from India; however, the airline shut down the Frankfurt hub on 30 October 2010. However on 14 July 2010, Air India chief, ArvindJadhav announced their intention to make the new terminal 3 at Delhi's Indira Gandhi International Airport the hub for international and domestic operations with the plans of starting new direct flights to Chicago (USA) and Toronto (Canada) and also taking almost all international long haul flights away from its former Primary hub at Mumbai's ChhatrapatiShivaji International Airport due to lack of space. This would streamline passenger movements and reduce operating costs. The airline also plans to open a new hub for its international flights at UAE's Dubai International Airport The national flag carrier of India with a worldwide network of passenger and cargo services, Air India is the only state-owned airline in the country, having recently merged with Indian Airlines.
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With its main base at ChhatrapatiShivaji International Airport, Mumbai and Indira Gandhi International Airport, Delhi, Air India connects 146 international and domestic destinations around the world, including 12 gateways in India with Air India Express, a fully-owned subsidiary of Air India. On 27 February 2011, Air India and Indian Airlines merged along with their subsidiaries to form Air India Limited.

INTRODUCTION TO AIR INDIA

Air India, the state-owned international carrier of the country, today has an extensive worldwide network offering both passenger and cargo services to more than 140 destinations across east and South Asia and the Middle East, East Africa, South East Asia, Western Europe and the UK. With Air India and Indian Airlines aligning their resources together, it has now become a part of National Aviation Corporation of India Ltd along with two of their subsidiaries, i.e. Alliance Air and Air India Express. In addition to together servicing 52 cities within the country, both these airlines offer direct connections to more than 35 international destinations all over the world.

Air India Baggage Allowance

As per Air India baggage policy, luggage more than 115 linear centimeters (55 + 40 + 20) in size needs to be checked-in. Anything less than that, as per baggage rules, can be treated as cabin luggage and taken inside the cabin. However, the baggage weight should not exceed 8 kgs. The Air India check-in baggage policy states that 25 kgs of luggage can be checked-in by Economy Class passengers, 35 kgs by Executive Class Passengers and 40 Kgs by First Class Passengers, free of charge. Baggage restrictions deny passengers to carry on board, items such as scissors, lighters, explosive materials, firearms and all kinds of flammable items.

Air India Destination & Services

Air India International Air India flies to and from many international destinations today. These include Osaka and Tokyo in Japan, Lahore in Pakistan, Seoul in South Korea, Male in Maldives, Dar-e-Salaam and Nairobi in Africa, Shanghai and Hong Kong in China, Dhaka in Bangladesh, Kathmandu in Nepal, Toronto in Canada and Colombo in Sri Lanka. In addition to these, Air India flies to United States of America's major airports such as John F Kennedy International Airport, Chicago O'Hare International Airport, Newark Liberty International Airport and the Los Angeles International Airport. It now offers direct non-stop flights to JFK International Airport from starting from the cities of Mumbai and Delhi. The recently added Boeing 777-200LR aircrafts have been chosen to operate on these routes.
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Additionally, Air India has code share agreement with many international carriers such as including Air France, Thai Airways, Lufthansa, Singapore Airlines and Malaysian Airlines. Schemes abound, flight tickets to these destinations come at highly subsidized prices. Other than these, many middle east destinations are serviced as well such as Kuwait, Dammam, Riyadh, Doha, Dubai, Jeddah, Abu Dhabi and Sharjah. Air India Domestic Sonee of the major Domestic destinations served by Air India include Amritsar, New Delhi, Jaipur, Ahmedabad, Mumbai, Bangaluru, Coimbatore, Kochi, Madurai, Khozikode, Chennai, Tirupati, Hyderabad, Vishakhapatnam, Kolkata, Gaya, Varanasi and Port Blair. Air India Fleet Air India's fleet has a total operational fleet of a whopping 149 passenger planes, out of which 35 are Wide Body Planes and 114 are Narrow Body. Other than these, there are 10 freight careers. While most of the planes are used by Air India itself, a few of them have been leased out as well.

Airlines Agencies
* Air India * Jet Airways * Kingfisher Airlines * Air India Express * Emirates Airlines * Lufthansa Airlines * Thai Airways * Singapore Airlines * American Airlines * British Airways * Sri Lankan Airlines * Malaysia Airlines * Etihad Airways * Qatar Airways * Air Arabia * Alaska Airlines * Delta Airlines * Gulf Air * Continental Airlines * Air France * Cathy Pacific Airlines * KLM Airlines * United Airlines * Air Asia

LOGO-LIVERY
The logo of the new airline is a red coloured flying swan with the `Konark Chakra' in orange, placed inside it. The flying swan had been morphed from Air India's characteristic logo, `The Centaur', whereas the `Konark Chakra' was reminiscent of Indian's logo.

The new logo would feature prominently on the tail of the aircraft. While the aircraft will be ivory in colour, the base will retain the red streak of Air India. Running parallel to each other will be the orange and red speed lines from front door to the rear door, subtly signifying the individual identities merged into one. The brand name `Air India' will run across the tail of the aircraft.
The painted on red palace style carvings on the outside of the windows refer to their slogan "your palace in the sky" which is written on the back of the aircraft

The Maharajah began merely as a rich Indian potentate, symbolizing graciousness and high living. And somewhere along the line his creators gave him a distinctive personality: his outsized moustache, the striped turban and his aquiline nose. The Maharajah began merely as a rich Indian potentate, symbolizing graciousness and high living. And somewhere along the line his creators gave him a distinctive personality: his outsized moustache, the striped turban and his aquiline nose.

VARIOUS SCHEMES FOR TICKETS

Special Schemes:
Air-India keeps launching special schemes to attract tourists to India. Of these, two successfulschemes are as follows: i) Stopovers The Air-India stopovers, specially designed for the convenience of tourists and businesstravellers who would normally overfly India, provide them an excellent opportunity to enjoy acomplete holiday at budget rates. The stopover scheme also applies to select cities overseas. In India stopover packages are offered at the four metro cities of Delhi, Bombay, Calcutta andMadras. . ii) India Super Summer Saver Scheme To make India a year-round destination by increasing traffic, in the lean summer monthsperiod of April through September, Air-India introduced Super Summer Savers in 1992. Thisspecial scheme is on with the collaboration of the Department of Tourism, Indian Airlines,and leading hotel chains, and helps use the summer months underutilized hotel capacity. Forthis scheme Air-India. Indian Airlines, and the participating hotels, offer special concessionalfares, and all tariffs remain frozen for the duration of the scheme which is April-September,These packages have proved to be popular, and in 1992 generated some 10,000 additionaltourists.

Other schemes:
1) Air India American Express Gold Card Enjoy 10% discount on Business Class tickets and 15% on Economy Class tickets. Pay 10% less on full fare Business Class tickets and 15% less on full fare Economy Class tickets - every time, on any domestic or International sector on Air India. The discounts mentioned above are not available when you book through Air India Call Centers, Air India's website or any other online portal. 2) Complimentary upgrades to Business Class
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Get a complimentary upgrade voucher to Business Class the moment you become an Air India American Express Gold Cardmember. These vouchers can be used on any of Air India destinations. 3) Complimentary Tickets when you fly anywhere on Air India* The Air India American Express Gold Card offers you amazing value and benefits:
Spends on Air India tickets charged to your Air India American Express Gold Card (over a 12-month period) Rs.4,00,000 Complimentary Tickets

One Economy Class return ticket* to any Air India online point in USA One Economy Class return ticket* to any Air India online point in Europe OR Far East Two Economy Class return tickets to Dubai OR One Economy Class return ticket to any domestic sector on Air India One Economy Class return ticket to Dubai OR Singapore OR Bangkok

Rs.3,00,000

Rs.1,40,000

Rs.1,00,000

User Development Fee (UDF), Passenger Service Fee (PSF) and any other govt taxes are applicable for all Domestic complimentary tickets. Fuel Surcharge, User Development Fee (UDF), Passenger Service Fee (PSF) and any other govt taxes are applicable for all international complimentary tickets. Any two offers / schemes cannot be clubbed together. Complimentary tickets for domestic sectors are only applicable for AI flights. The port of origin for all complimentary tickets must be India.

4) Enjoy Global Acceptance with No Preset Spending Limits With no pre-set spending limit you can now charge virtually all your expenses to the Card, without being constrained by a credit limit, anywhere in the world. Your charges are approved based on your financial particulars and spending and payment patterns. What's more, you can pay conveniently in Indian Rupees.

5) Accident Insurance up to 75 lakhs You are automatically insured against loss of life in an air accident for up to Rs. 75 Lakhs when you purchase your Air India ticket on the Card (up to Rs. 40 Lakhs if the tickets are not purchased on the Card) and Rs. 3 Lakhs for non air accidents. What's more, an insurance cover of Rs. 4 Lakhs is available to your supplementary Cardmembers as well.

Benefits on Air India Silver Card Holders

10% discount on Normal Full Fare Business Class sector travel on domestic and on IATA fare on international Air India sector Travel. 15% discount on Normal Full Fare Economy Class sector travel on domestic and on IATA fare on international Air India sector Travel. Air Insurance of INR 50 Lakhs Non air insurance of INR 3 Lakhs (Above is applicable only on self travel of Co-brand Card member)

Special Travel Privileges As a Card member, enjoy special privileges from Air India including:

FFP membership (for non Flying Returns members) Extra-baggage Allowance, Priority confirmations, Tele check-in facilities as part of FFP membership benefits on IC Code flights. Global Calling Card and Global Assist Convert everyday purchases on your Card into air-miles Redeem flights faster by clocking 100% more Membership Reward points on all your Card spending. These points are freely transferable to the Air India (IC)/Air India Flying Returns program as add on mileage points. (facility available by paying a fee of Rs. 400 per annum).
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PROMOTION & OFFERS

Air India is proud to announce UNICONNECT as its telecom partner, to all members of "FLYING RETURNS". It reduce theirr mobile expenditure by more than 70% on roaming charges

UNICONNECT specializes in providing the most cost effective global roaming solutions across the globe through its wide portfolio of country specific SIMS & Global SIMS. With coverage across 200 countries and totally FREE Incoming calls in over 60 countries, rest assured of dramatic savings on your overseas mobile bills.

Exclusive offer for all Air India Domestic Passengers, Buy or Redeem amazing deals.

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MTV Promotion
Air-India, In association with the Department of Tourism and the Taj Bengal, Calcutta,sponsored a promotional programme through the popular MW channel network. The programmefocussed on Calcutta. Calcutta being the gateway to Eastern India, this promotion generated good publicity for this key metropolis and enhanced its position on India's tourism map.

Indian Crafts Exhibition in Austria

From mid-April till September 93 a major exhibition of Living Indian Crafts was organised at Schallaburg Castle (Lower Aush). This was the first time that an Indian presentation was made in Austria on such a large scale.India is the first non-European theme to be so featured. The exhibition featured a display of contemporary Indian handicrafts.The event was organised jointly by Air-India. ICCR, the Crafts Museum, and the Department of Tourism.

Food &Culture Festivals

Following the popularity of the Goan Food and Cultural Festivals organised in Singapore and Kuala Lumpur in 1992, Air-India is planning to organise more such events. These festivals will feature other Indian states like Rajasthan, and will be organised in collaboration with the respective tourism bodies involved.

Magasin du Nord India Promotion'

Indian handicrafts and goods will be prominent in Scandinavia, thanks to an India promotion by Magasin du Nord, the largest department stores chain in those countries. The promotion to be held in 1994, will feature Indian handicrafts in the Store's catalogues. Before the promotion, a team of photographers will visit India to film a cross-section of this country's crafts. An Air-India theme song in Hindi was produced on video and distributed to sales offices within India and to stations with subshtial ethnic market.

Theme Campaign
A theme campaign in colour "Fly With Your Very Own" won the awards of the AdveqisingClub and also AdveRising & Marketing magazine. Besldes, the advertisement given by AirIndia not only mention the qualities of the airline but talk of India as a destination.

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AI Environment policy

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Oldest man flies AI to Delhi

A very special passenger, AdigalarAsiriyar, was among the group of Tamil scholars and dignitaries who flew to Delhi on May 4, 2011 by flight AI 439.

AmbedkarJayanti celebrated
Employees of Air India proudly celebrated the birth anniversary of Dr B R Ambedkar on April 14, 2011 by paying rich tributes and holding various functions in his honour in different offices all over the country.

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Air India introduces mobile check-in

The mobile check-in facility is available to all domestic passengers from the six major metro cities viz. Delhi, Mumbai, Chennai, Kolkata, Hyderabad and Bengaluru from April 7, and will be subsequently extended to other stations and international flights.

Health camp
Northern Region Medical Department had organised a Diabetes Awareness Week from May 9 toMay 13, 2011, at Terminal I. The camp was held for two hours daily to screen, educate and guide employees on the health problems triggered by increase in blood glucose (sugar).

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International Womens Day International Womens Day

Celebrations started a day earlier in Western Region in Mumbai. A greenery drive was organised at the New Engineering Complex Sahar, Mumbai, on March 7, 2011. Saplings were planted by women employees near the security department. The team, led by GM Finance WR, MrsSarit Sharma, turned up dressed in green, to spread a message about nurturing the environment through greenery.

Savings in electricity bills

The Civil Engineering unit at New Engineering Complex, Mumbai, has effected an average savings of Rs 5 lakh per month by changing the electricity power supply provider from Reliance Energy to Tata Power from February 11.

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Blood donation camp

As part of its third anniversary celebrations, Air India SATS (Singapore Airport Transport Services) Limited organized a blood donation camp in association with Lions Club of Bangalore Sanjay Nagar, on May 23. As many as 100 employee donated blood during the day, with a total of 134 units being donated to the Lions Club.

AI participates in Lavasa Womens Drive Car Rally

The Lavasa Womens Drive is a popular event in Mumbai that seeks to spread awareness about cancer. This year, the drive was held on February 27 and Manager Personnel, Ms Mohana Kumar, took part in it representing Air India. Having been selected out of 352 entries to take part in the rally,

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PUBLIC RELATIONS AND TOURISM GENERATING ACTIVITIES

Air-India undertakes a number of activities to attract individual tourists, special interest groups,- c conventions and congresses, adventure lovers, etc. The whole idea of these exercises is to: a project India as an attractive tourist destination, and a how Air-India can make it much more convenient and meaningful. These activities can be listed under two main categories: i) Mainline Activities ii) Ancillary Activities i) Mainline Activities: These include: Participation in major international travel trade shows and meets. Such as ITB (Berlin), WTM (London). JATA (Japan), FITUR (Spain), and EIBTM (Switzerland). At the meets, promotional literature is distributed, audio-visuals are screened, press briefings held, and information is gathered relating to contemporary world tourism trends. Sponsoring visits to India of travel agents and writers (FAM trips), thereby increasing awareness of the country's various attractions for the foreign tourists. Arranging Indian cultural events and food festivals and department stores promotions overseas, thus providing foreign countries a taste of India's rich cultural heritage and culinary range. Goan food and cultural festivals held in Singapore and Malaysia were very popular and several similar events are planned in the coming months. Creating awareness and interest overseas of the range of Special Interest activities available in India, like fishing, wildlife and golf etc. Also organising buyer-seller marts involving foreign agents and local tour operators. a Involvement with the International Congress and Conventions Association(ICCA), to tap the extensive and growing market of conventions and congresses. Assisting state governments to promote their tourist facilities overseas, specifically high-lighting salient features of interest to the foreign tourist.

ii)

Ancillary Activities:
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These include: Providing mandatory order passages to the Department of Tourism for inviting travel agents, travel writers and media representations, Organizing 'Know India' seminars' overseas to update the travel trade about India and the country's tourism product, Producing and screening of audio-visuals highlighting select aspects of India. These films are sent to various Air-India offices overseas for screening to help in their tourism promotion efforts. The films cover various subjects such as golf, wildlife, trekking, convexitions etc. Publishing a bi-monthly newsletter to bring about effective communication within Air India offices worldwide. This publication highlights tourism and travel events of interest and concentrates on imparting information which is of interest and use to our overseas offices in promoting inbound traffic into India. Organising orientation seminars for Air-India officers being posted overseas to familiarise them with the latest news and trends regarding the Indian tourism product and its infrastructure. These activities help in creating favourable conditions of tourist attraction. Apart from these some special measures with specific target groups are also undertaken..

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Achievements
Tourism has a direct bearing on air transport. 90% of the tourists arriving into India come byair. However, India's share in the world tourist traffic is less than 1%. Further India's shareof total world international air passengers traffic has been quite low at 3%. Out of total trafficof 4218 thousand passengers (1984) travelling to and fro between India and various foreigncountries, Air India carried 1473 thousand (35%). In 1992-93 Air India carried 2201 thousandpassengers. However, Air India's share in the home market has declined to 26% from 35% inthe early eighties.Various studies have projected an average annual growth of 5.2% for international passengertraffic to and fro India. This growth has shown stagnation decline due to economic recessionand political instability in the sub-continent as a whole. The Open Sky Policy pursued by theGovernment-of India under the economic liberalizationprogram has also shown negativeimpact on Air India since 1990. Inspite the setbacks and negative trends Air India's foreignexchange earnings and Savings improved to 750 crores in 1993.

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INTERNAL CONTROL SYSTEMS

The Company continues to ensure proper and adequate internal control systems and procedures commensurate with its size and nature of business. These control systems ensure that all assets are safeguarded and protected against loss from unauthorized use and that transactions are authorized, recorded and reported correctly. The internal control system enables documented policies, guidelines, and authorization and approval procedures. The Company has an extensive system of internal controls which ensures optimal utilization and protection of resources, IT security, accurate reporting of financial transactions and compliance with applicable laws and regulations as also internal policies and procedures. The internal control system is supplemented by extensive internal audits, regular reviews by management and well documented policies and guidelines to ensure reliability of financial and other records to prepare financial statements and other data. The Company has a well defined manual on delegation of authority and administrative powers, based on which, the authorities exercise their powers. This manual is reviewed periodically to cope with the changes necessitated by the needs of the organization. The said manual, along with the Companys key functional process manuals, further strengthens the internal control system of the organization. The Company has independent internal audit systems to monitor the entire operations and services spanning over all locations, business and functions on a regular basis. The Company has also employed outside consultants in its various areas of functioning in order to reduce/monitor its cost platform.

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FINANCIAL MANAGEMENT
Balance sheet(Rs crore)
Mar ' 09 Sources of funds Owner's fund Equity share capital Share application money Preference share capital Reserves & surplus Loan funds Secured loans Unsecured loans Total Uses of funds Fixed assets Gross block Less : revaluation reserve Less : accumulated depreciation Net block Capital work-in-progress Investments Net current assets Current assets, loans & advances Less : current liabilities & provisions Total net current assets Miscellaneous expenses not written Total NOTES: Book value of unquoted investments Market value of quoted investments Contingent liabilities Number of equity sharesoutstanding (Lacs) 8,746.02 5,255.55 3,490.47 31,116.37 122.42 43.03 25,918.42 1450.00 7,478.95 5,209.61 2,269.34 24,226.53 89.36 47.07 26,340.93 1450.00 4,386.48 2,019.38 2,367.10 7,556.97 90.05 36.78 25,994.75 1538.36 3,164.77 2,670.86 493.91 3,961.71 1538.36 2,116.88 3,090.82 -973.94 1,586.65 1538.36 24,329.40 1,838.05 22,491.35 5,011.37 123.18 18,654.56 760.12 17,894.44 3,972.63 90.12 6,471.27 4,366.85 2,104.42 2,994.75 90.70 7,109.88 4,914.43 2,195.45 1,185.33 87.02 7,121.60 4,641.18 2,480.42 21.91 58.26 2,365.95 28,542.07 31,116.37 2,891.75 15,521.65 24,226.53 1,846.69 5,818.41 7,556.97 1,243.24 2,378.67 3,961.71 565.95 695.74 1,586.65 145.00 63.35 145.00 5,668.13 153.84 -261.97 153.84 185.96 153.84 171.12 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05

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Capital structure

From Year

To Year

Class Share Equity Share

Of Authorized Capital

Issued Capital

Paid Up Shares Paid Up Paid Up (Nos) Face Value Capital

2005

2006

425.64

153.84

153836427

10

153.84

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FINANCIAL PERFORMANCE:
The financial performance of the Company during the year 2010-11 was as under : (Rupees in Million) Particulars 2010-11 2009-10

Profit / (Loss) Before Depreciation (51735.7) (41621.4)* & Tax 16901.0 13887.6* Less : Depreciation (68636.7) (55509.0)* Profit / (Loss) Before Tax 15.0 15.4* Less : Provision for Tax Add : Deferred Tax Benefit Net Profit / (Loss) (68651.7) (55524.4)

OTHER FINANCIAL INFORMATION Share Capital : Authorized Share Capital The Authorized Share Capital of the Company is Rs. 50,00,05,00,000/- (divided into 5,00,00,50,000 equity shares of Rs.10/- each). Issued, Subscribed & Paid-up Share Capital The Issued, Subscribed & Paid-up Share Capital of the Company, is Rs.2,145,00,00,000/- divided into 214,50,00,000 fully paid up equity shares of Rs.10/- each. During the year 2011-12, Government of India infused Rs.12,000 million towards equity capital. Aircraft Project Loans : As on 31 March 2011, the position of aircraft loans, including future lease obligations in respect of finance leases, was as under : (Rupees in Million)
Total Loan due as on 1 April 2010 Add : Amount drawn during April 2010 to March 2011 Less : Amount repaid during April 2010 to March 2011 Less : Exchange adjustments due to revision in rates of Currencies Add : Interest accrued and due as on 31 March 2011 Balance as on 31 March 2011 1,98,801 22,939 14,954 (1,003) 1,098 2,06,881

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Annual Plan Outlay 2010-11 The Government had approved an Annual Plan Outlay of Rs.56,348.0 million (including Rs.12,000.0 million for equity infusion) for the year 2010-11. Against this outlay, the actual expenditure for the year was Rs.34,189.6 million (including Rs.12,000.0 million for equity infusion) as detailed below : Annual Plan Outlay 2011-12 The Annual Plan Outlay for the year 2011-12 is Rs.57,493.6 million including Rs.12,000.0 million for equity infusion from Government. The Company has spent Rs.14,595.5 million upto September 2011. Twelfth Five Year Plan 2012-13 to 2016-17 : Air India has submitted an outlay of Rs.329,637.0 million for the Twelfth Plan period as detailed below: (Rupees in Million) Aircraft Projects Non-Aircraft Projects Budgetary support from Government 111,8 77 18,6 50 199,1 10

Aircraft Financing
During the year 2010-11, Air India availed a Bridge loan amounting to US$473 million for financing 3 B777-300ER aircraft and 1 GE spare engine. Subsequently, this Bridge loan was re-financed through US Exim financing in August 2011 at a highly competitive interest rate structure resulting in savings of Rs.800 million p.a. by way of interest. Similarly, the loan for acquisition of Airbus aircraft amounting to Rs.55000 million given by a Consortium of Banks led by IDBI was refinanced in September 2011 with the ICICI Bond issue maturing in 15-20 years at a lower rate of interest which resulted in a saving of approximately Rs.1800 million p.a. For the B787-8 financing, the airline is exploring a number of options including Sale and Lease Back. The US Exim Bank hasalready issued a Commitment Letter to support delivery financing for the first 12 B787-8 aircraft to be inducted into the fleet.As of date, bids for the first 7 B787-8 aircraft for Sale and Lease Back have already been floated and the response is awaited.

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FINANCIAL CRSIS AND RESTUCTURING

Around 20062007, the airlines began showing signs of financial distress. The combined losses for Air India and Indian Airlines in 200607 were 770 crore (US$140.14 million). After the merger of the airlines, this went up to 7,200 crore (US$1.31 billion) by March 2009. This was followed by restructuring plans which are still in progress. In July 2009, SBI Capital Markets was appointed to prepare a road map for the recovery of the airline. The carrier sold three Airbus A300 and one Boeing 747300M in March 2009 for $18.75 million to survive the financial crunch. As of March 2011, Air India has accumulated a debt of 42,570 crore (US$7.75 billion) and an operating loss of 22,000 crore (US$4 billion), and is seeking 42,920 crore (US$7.81 billion) crore from the government. For 3 months (JuneAugust 2011), the carrier missed salary payments and interest payments and Moodys Investor Service warned that missing payments by Air India to creditors, such as the State Bank of India, will negatively impact the credit ratings of those banks. A report by the Comptroller and Auditor General (CAG) blamed the decision to buy 111 new planes as one of the major causes of the debt troubles in Air India; in addition it blamed on the ill timed merger with Indian Airlines as well. Due to high fuel and loan costs, Indian government pumped 32 billion into Air India since April 2009 and in March 2012 government bailed out Air India Ltd. with a 67.5 billion ($1.4 billion) which the amount almost double of the federal government has spent on new hospitals over the three years. As of May 2012 the carrier invited offers from banks to raise up $ 800 million via external commercial borrowing and bridge financing.

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RETURN TO PROFITABILITY PLANS Revenue Passenger-Kilometers, scheduled flights only, in millions Year 1957 1960 1965 1969 1971 1975 1980 1985 1989 2000 Traffic 395 521 1074 1524 1781 3528 6597 7668 9082 12006

Source: TATA World Air Transport Statistics

FINANCIAL REORGANIZATION The new Chairman and Managing director wants to change the order of some of the 111 planes ordered in 2006 to get narrow-body aircraft instead of the wide-body aircraft. On 4 May 2012, the airline was fined $80,000 by the U.S Transportation Department for failing to post customer service and tarmac delay contingency plans on its website and adequately inform passengers about its optional fees. On 15 May, the Union Civil Aviation Minister Ajit Singh stated that the Government was giving Air India one last chance and that it must perform
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in order to qualify for a bailout. The financial restructuring plans were hit hard when Air India pilots decided to go on a strike on 8 May 2012 in order to protest management decisions to train Air India and former Indian Airlines pilots for the newly inducted Boeing 787 Dreamliner fleets. In spite of the Delhi High Court ruling the strike illegal, the strike continued for 58 days. The already reeling airline lost an additional 600 crore because of the pilot strike.

Criticism and controversy

State ownership Air India remains as a state-owned company through Air India Limited. However, government ownership of the airline has subsequently led to multiple problems, such as enormous market share losses, declining profits, and escalating labour disputes. Historically, there have been numerous attempts to privatise Air India in hopes of a better future, but political interference has since prevented this goal from being achieved. Furthermore, it is also believed that mismanagement and corruption have impacted Air India's financial performance. Star Alliance In December 2007, Star Alliance invited Air India in an effort to expand its presence in the Indian subcontinent. However, issues with technology and software upgrades and the aftermath of its merger with Indian Airlines have delayed its entry into the alliance for roughly three and a half years. When the final deadline for joining came in July 2011, Air India's application was suspended, and was told it failed to meet the minimum criteria to join. In response, many of Air India's officials complained to Star Alliance about the suspension of its application, claiming that they already met all of the requirements. [But in October of that same year, talks between Air India and Star Alliance have resumed.

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REALISTIC REVIVAL PLAN

It was in June last year that Air India Chairman-cum-Managing Director ArvindJadhav gave a presentationon the companys turnaround plan to Union Aviation Minister. Plans to turnaround performance :
Several measures were undertaken to improve the performance of the Company : Rationalization of certain loss making routes. Return of leased aircraft. Induction of brand new fleet on several domestic & international routes thereby increasing passenger appeal. Introduction of non-stop services to USA & Canada. Phasing out old fleet and consequent reduction of maintenance cost. Reduction ofcontractual employment & outsourced agencies. Critical analysis of Fuel consumption on all flights by setting up a Fuel Council and Fuel Manager. Removal of overtime and certain staff perks and relocation of officers from abroad to India. Closure of some foreign stations including offline offices. Increase in passenger, cargo, excess baggage revenue through aggressive sales & marketing strategy including a separate Cell for attracting Government traffic. Leveraging the assets of the company to increase MRO revenue as well as revenue from real estate properties. Introduction of Common Code through a common Passenger Service System (PSS) effective 27 February 2011 which would ensure seamless connectivity on domestic & international flights. Implementation of Quickwin IT Solutions including upgrade of Revenue Management System, introduction of SAP-ERP throughout the network. Establishment of Hub Control & Networking / Crew Scheduling System.

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BUDGET ALLOCATION TO AIRLINE INDUSTRY Government of India has taken several steps to tide over the crisis," the statement said
mentioning that the government in the federal budget 2011-12 had allocated Rs 2,000 crore for the airline and that another Rs 1,200 crore was expected to be infusedthis year". Currently the airline, which is laden with a cumulative debt of Rs 40,000 crore it incurred over aircraft acquisition and as short-term loans to maintain its operations, expects a fresh equity infusion of Rs 1,200 crore in July. The cash-strapped carrier is also seeking a total infusion of Rs 17,000 crore, which includes Rs 5,000 crore for this fiscal year alone, the report pointed out.

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AI LINKS MORE CITIES

AI links Gwalior with Mumbai

On April 18, Minister for Civil Aviation, MrVayalarRavi, and Minister of State for Commerce and Industry,MrJyotiradityaScindia, flagged off the inaugural flight from Gwalior to MumbaIat the RajmataVijayaRajeScindia Civil Terminal in the presenceof CMD ArvindJadhav,MRO-SBU Head VipinSharma, ExecutiveDirector (North)Vijay Paul and otherdignitaries. With this flight, AirIndia has linked Gwaliorand Mumbai, therebyconnecting the city withthe national capital aswell as the financialcapital of the country, facilitatingthe movementof business and leisuretravellers.

Alliance Air linksKanpur-Kolkata

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Air India continuedwith its expansion ofnetwork with Kanpurgetting linked to Kolkata. The inauguralflight of Alliance Air at Chakeri Airport in Kanpurfor Kolkata on May 24, 2011.

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