Case Study : Ai Airlines Limited

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1. Executive summary AI Airlines Limited is a new consumer airline, a wholly owned subsidiary of Air India Limited. It is being organized to take advantage of a specific gap in the short-haul domestic travel market. The gap exists in low cost service out of Delhi. The gap in the availability of low-cost service in and out of the Mumbai hub coupled with the demand for passenger travel on selected routes from Mumbai indicates that a new entrant airline could be expected to capture a significant portion of current air travel business at that hub. The management of AI Airlines Limited is experienced in airline industry including the engineering and the flight operations. Previously the management grew Air India Express from two Airbus 319…show more content…
There is a temptation to fix on growth at the expense of profits. Also, rapid growth will be curtailed in order to keep maintenance standards both strict and measurable. 1.4. Company Summary AI Airlines Limited is being formed in October, 2015 and its offices will be in Mumbai. 1.5. Company Ownership AI Airlines Limited is a wholly-owned subsidiary of government-owned Air India Limited. 2. Situation Analysis Strength of AI Airlines Limited: - AI Airlines Limited has a strong backing from the India Government through its parent company; - Hub in the capital of the country; - The parent company has the top airline brand in terms of market capitalisation and number of passengers carried. - Provider of low budget, no frills air travel servicing many of the leading regions in the India. Weakness of AI Airlines Limited - Domestic air travel is a competitive industry with AI Airlines Limited’s main competitors being Air India Express, AirIndia Regional and AirAsia India plus Indian Railways which price remains affordable for the most part of domestic travellers; - The company does not offer a free food service on longer flights of 2 hours plus; -Poor quality of regional airports. Opportunities of AI Airlines Limited - Possible opening of alternative routes to major regions in India. -Offering of free refreshments on flights with a travel time of over two and a half hours. This would offer an extra perk

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