Air India - Tata Group Owned Aviation Business Excelling In Affordability and Comfort

Sarika Anand

Jun 25, 2022 — 12 min read

Air India Success Story

Company Profile is an initiative by StartupTalky to publish verified information on different startups and organizations. The content in this post has been approved by Air India.

Air India is the country's best flying ambassador. Thanks to the 18,000 Air Indians who have continued the legacy of rising high, the drive to succeed and the passion that marked Air-inaugural India's flight on October 15, 1932, is still indisputably present today.

In addition to domestic flights, Air India, covers southern and eastern Asia, Europe, the Middle East, Africa, the United States, Australia, and Canada. It was formed in 1932 (as Tata Airlines) and headquartered in Mumbai.

After the transaction was finalised by Air India Limited's previous owner, the Government of India, it is now held by Talace Private Limited, a Special-Purpose Vehicle of Tata Sons.

Know more about Air India, its company history, business model, funding and investors, etc.

Air India - Company Highlights

Startup Name	Air India
Headquarters	New Delhi
Industry	Aviation
Founder	J.R.D. Tata
Founded	1932 ( as Tata Airlines in Mumbai)
Valuation	₹ 14,718 Crore
Revenue	₹ 26,430 Crore
Parent Organisation	Tata Group
Website	airindia.in

Air India - How it Works?
Air India - Industry
Air India - Founder
Air India - Startup Story
Air India - Name, Logo, and Tagline
Air India - Mission, and Vision
Air India - Products
Air India - Business Model
Air India - Marketing Campaigns
Air India - Acquisitions
Air India - Competitors
Air India - Challenges Faced
Air India - Future Plans

Air India Case Study

Air India - How it Works?

Bharat Ratna J.R.D. Tata founded an airline in 1932, realising his ambition and beginning the path that would become Air India. His love of flying, which led him to become the first Indian to acquire a commercial pilot's licence, ignited the beginnings of Air India with the introduction of postal service from then-Bombay to Karachi via Ahmedabad. Since becoming nationalised in 1953, Air India has grown to become a significant domestic and international brand.

After joining Star Alliance, the largest global airline alliance, in July 2014, Air India's international connectivity, which includes cities in Europe, The United States, The United Kingdom, Africa, the Gulf, Asia, and Australia, was improved. The airline flies to every remote county in our nation.

It has consistently stood by the country and its citizens in times of need and has been crucial in evacuation operations throughout crises like the Gulf War, the Coronavirus pandemic, and the most recent situation in Ukraine.

After re-joining the Tata Group on January 27, 2022, Air India is ready for takeoff, reinventing its objectives and strategy with a focus on overall excellence and customer-centric procedures.

Mr. Ratan Tata, Chairman Emeritus, Tata Sons, said on the occasion, "The Tata group welcomes Air India's new customers and is thrilled to work together to make Air India the airline of choice in terms of passenger comfort and service."

102 local and foreign destinations are served by the fleet of Airbus and Boeing aircraft operated by Air India. Along with many key cities around India, the airline has its hub at Indira Gandhi International Airport in New Delhi. With a market share of 18.6%, Air India is the biggest airline operating in India. Air India offers service to more than 60 overseas locations on four continents. On July 11, 2014, the airline joined Star Alliance as its 27th member.

Air India - Industry

Almost all facets of air travel and the operations that support it are included in the aviation business. This implies that it covers the whole airline sector as well as the manufacture of aircraft, research organisations, military aviation, and much more.
The number of operational aircraft in the global aviation fleet at the start of 2022 was equal to that of 2017. However, at 25,500, it was about double the epidemic low mark set in the middle of 2020.

The business is now again set up for a decade of development after the Covid-19 outbreak lasted for two years. Domestic travel demand is anticipated to approach its pre-pandemic high in early 2023 on a worldwide scale. The projection then calls for continued growth through the rest of the decade at rates that even outpace improvements in GDP.

The ten years through 2032 are likely to be packed with problems that will put aviation's resilience and profitability to the test, unlike the ten years between 2010 and 2019 when the sector had stable yearly gains in demand. The key issue for aviation going ahead is not its capacity for growth, but rather it's capacity for profitable growth.

Air India - Founder

Air India is founded by Jehangir Ratanji Dadabhoy Tata on 29 July 1946.

J.R.D Tata

Indian aviator, manufacturer, businessman, and head of the Tata Group, JRD Tata was a non-resident Indian, son of renowned industrialist Ratanji Dadabhoy Tata and his spouse Suzanne Brière. His mother was the first Indian lady to drive a vehicle, and he was the country's first-ever certified pilot in 1929. He is most known for founding various businesses that are part of the Tata Group, including Voltas, Air India, Titan Industries, Tata Consultancy Services, and Tata Motors. He won two of India's highest civilian honours—the Padma Vibhushan and the Bharat Ratna—in 1955 and 1992, as well as the French Legion of Honor in 1983.

Air India - Startup Story

In 1932, Air India launched Tata Airlines under the name of its founder, J. R. D. Tata. Between the Indian cities of Ahmadabad, Bombay, Bellary, and Madras and Karachi, Pakistan, the line transported mail and people. Within a short period, Tata Airlines' itineraries featured stops in Trivandrum, Delhi, Colombo, Lahore, and other nearby Indian towns.

After World War II was over, the airline changed its name to Air-India Limited and went public. With the government owning a 49 per cent stake in the business, the airline expanded its reach outside of India in just two years, operating frequent flights to Cairo, Geneva, and London. The name of the company was once again changed to Air-India International Limited to reflect its expanded range of services.

For a variety of factors, India fared better in the airline business than the majority of other emerging nations. Air India mostly used native-born pilots, unlike other airlines which had to rely on foreign pilots to fly their aircraft. Similar to how many competent Indians were available to maintain India's fleet and educate and manage its workforce, many other nations had to look outside of their borders for this type of knowledge. Along with its sibling carriers, Air-India profited from these benefits.

Early in the 1950s, Air India saw competition for its routes for the first time. Due to the affordable, war-surplus DC-3s that were becoming available, several new airlines were starting to emerge. There were no less than 21 established airlines, 11 of which had been granted permission to operate in Indian airspace.

Expanding its aviation business even further was one of Air India's main objectives for the nineties. At the start of the decade, Air-India accounted for around 30% of the country's air cargo business, with more than three dozen foreign airlines transporting the remaining 70%. To expand its ability to transport exports, the airline intended to hire more jet freighters. The International Airports Authority of India enhanced the ground handling and infrastructure at the entrances it manages, increasing its appeal to airlines and freight forwarders. With these modifications in place, cargo revenue for the 1990 fiscal year was the US $195 million, or 21% of Air India's revenue.

Air India - Name, Logo, and Tagline

When J. R. D. Tata of Tata Sons, an Indian aviator and business mogul, launched Air India, it was originally known as Tata Air Services before changing its name to Tata Airlines. The airline used a six-seat Miles Merlin to launch its inaugural domestic route from Bombay to Trivandrum. It was given a new name in 1938, first as Tata Air Services and then as Tata Airlines.

Although its founder J. R. D. Tata would continue in that role as Chairman until 1977, the Government of India approved the Air Corporations Act in 1953 and bought a controlling share in the airline from Tata Sons.

As part of a reorganisation, the business was given the new name Air India International Limited and the domestic services were given to Indian Airlines.

The tagline of Air India says, "Air India… Truly Indian"

The airline's previous logo included an orange "Konark Chakra" inside of a crimson flying swan. The soaring swan is a modified version of the iconic Air India emblem, "The Centaur," while the "Konark Chakra" is evocative of the Indian logo.

Air India - Mission, and Vision

Air India's mission statement says, "to deliver the highest quality of service around the world and be the epitome of Indian hospitality and to be India's flag carrier and provide seamless travel within India and the world."

Air India's vision is, "to become India's most efficient and preferred LCC on regional and international routes; constantly exceeding guest' expectations in terms of quality, affordability, convenience and comfort."

Air India - Products

Air India is one of India's largest airlines, offering both international and local flights. Transport for people and goods was originally Air India's two main services. But in 2012, the freight transport was shut down. It exclusively uses passenger transportation for operation. For the same, it makes use of Boeing and Airbus aircraft.

Some of its key products include premium lounges and in-flight entertainment. It also rents a number of its fleets to cut costs while maintaining quality. Air India's extensive network of routes allows it to provide flights to the world's most significant cities and commercial hubs. To encourage repeat business from its customers, it offers a high degree of safety.

Air India - Business Model

Air India's Financial Performance (2016 - 2020)

According to the much research conducted and information obtained, Air India has solidified its position as India's largest and most productive air carrier on all fronts. Millions of travellers regularly use their service, which is current and useful.

They aggressively position themselves in the market utilising a range of marketing strategies, such as social media campaigns and advertising, to tell customers about upcoming packages and other things. Customers consider their affordable costs to be a competitive advantage and a selling point. Overall, they have reached new heights while maintaining their innovativeness thanks to their marketing and sales strategies.

Some of the elements that determine the pricing include the path used by air traffic, the distance travelled, and the number of stops made along the trip. Given how fiercely competitive the airline industry is, competitive pricing makes sense. Within a flight, there are simultaneously two different pricing ranges:

Economy class
Business-class

Middle-class families may easily afford flight tickets on Air India. Business-class passengers are the main target of premium pricing since they are more likely to pay for and use premium services.

Air India - Marketing Campaigns

Through various media, including print, radio, television, and internet platforms, marketing efforts spread the word about items. It connects with the client by conveying a relevant message in addition to promoting the goods. The greatest and safest travel experience is promised by Air India campaigns.

A dig at Indigo - After a video showed one of their personnel fighting a passenger, Air India posted two advertisements on Twitter in a covert thread towards IndiGo Airlines. Air India poked fun at IndiGo after the assault incident by promising "unbeatable service" and using the letter "beat" in blue, IndiGo's signature colour. The second one has the slogan, "We raise our hands ONLY to offer namaste," and features Air India's mascot, "Maharaja," in his signature pose. On Twitter, people criticised IndiGo over the event and called for a boycott of the airline.
Mascot - The Air India Maharaja, arguably the country's most known mascot, is typically seen standing with his hands in a polite namaste or bowing with his palm placed over his heart to greet visitors. But the mascot has since undergone several additional changes. Let's examine a few of them.
War Ads - Air India and IndiGo are in war advertising. To entice customers, Air India is boosting up its advertising effort. Right behind IndiGo's check-in desks, Air India posted an advertisement on a wall panel that said, "Next time fly with Air India and experience the difference." Although no competitors are mentioned, the strategic positioning speaks for itself. Even IndiGo made no concessions. It responded to Air India with a commercial.

However, the national carrier has never engaged in such aggressive marketing. With loud advertising and promotional discounts, Air India is attempting to get consumer attention.

Air India - Acquisitions

Acquiree Name	About Acquiree	Date	Amount
AirAsia India	AirAsia India provides scheduled air passenger transportation, air cargo transportation, and charter flight services.	Jun 14, 2022	-

Air India - Competitors

Top competitors in the competitive list of Air India are:-

Indigo
Jet Airways
Go Air
Air Asia
Etihad
Oman Air
Thai Airways
Singapore Airlines
Emirates
Jet Airways
Spicejet

Air India - Challenges Faced

The COVID-19 outbreak and rising fuel prices, according to claims in the media, are expected to lead India's airlines to suffer their largest-ever loss of almost 20,000 crore rupees this fiscal year. Since its merger with Indian Airlines in 2007–2008, the airline has never turned a profit. In actuality, it disclosed a 7,017 crore rupee loss for FY21. The Tatas want to increase on-time performance and in-flight amenities now that they are back in the Air India cockpit. They must also encourage a corporate culture among the airline's staff. Problems like outdated aircraft and subpar cabin goods must also be addressed.

The fleet's update and maintenance come next. Air India has 141 aircraft in its fleet, a mix of narrow and wide-body Airbus and Boeing models, but has committed to giving Tatas just 118 of them in flyable condition. The 787 fleet of Air India's airline is likewise severely short on components and engines. Tata group discovered that at any one moment, at least five 787s were sitting idle owing to a lack of engines. On the Boeing 777 fleet, which serves as the backbone of Air India's successful US operations, at least two aircraft have been determined to be unfit for flight, and the others require extensive refurbishment.

How well the Tata Group will organise its aviation operations is an equally significant task.

Air India - Future Plans

"In terms of fleet, we know we have work to do," Natarajan Chandrasekaran, chairman of the Tata Group, told. "We will address it with utmost urgency. We'll upgrade our fleet, we'll bring modernity in our fleet, we'll bring a new fleet."

In the upcoming months, Mr Chandrasekaran informed employees that Air India will swiftly boost the number of its narrow-body and wide-body aircraft. The average fleet age of Air India is more than ten years.

As per the company's site, its fleet presently consists of 153 aircraft. This comprises 49 wide-body aircraft produced by Boeing and Airbus, including planes from the most popular 320 and 737 families. This is a challenging combination since each kind of aircraft demands a different set of pilot and crew skill sets.

Even though reductions are typical in such huge agreements, a sale for 50 brand-new 787-9 planes may be worth $14.6 billion at sticker pricing. The oldest models of the fuel-efficient workhorse are flown by Air India, one of the Boeing Dreamliner's earliest purchasers worldwide, albeit some of them are still grounded owing to a lack of components.

FAQs

When was Air India founded?

Air India was founded in 1932 (as Tata Airlines) and headquartered in Mumbai.

Who is the founder of Air India?

Air India was founded by Jehangir Ratanji Dadabhoy Tata in 1946 in New Delhi.

Is Air India and AirAsia India same?

Air India acquired AirAsia India on Jun 14, 2022.

Who are the top competitors of Air India?