Fund Flow Analysis

1. INDUSTRY PROFILE
Aviation Industry in India is one of the fastest growing aviation industries in the world. With
the liberalization of the Indian aviation sector, aviation industry in India has undergone a
rapid transformation. From being primarily a government-owned industry, the Indian aviation
industry is now dominated by privately owned full service airlines and Low Cost Carriers
(LCC). Private airlines account for around 75% share of the domestic aviation market.
Earlier air travel was a privilege only a few could afford, but today air travel has become
much cheaper and can be afforded by a large number of people.

The origin of Indian civil aviation industry can be traced back to 1912, when the first air
flight between Karachi and Delhi was started by the Indian State Air Services in
collaboration with the UK based Imperial Airways. It was an extension of LondonKarachi flight of the Imperial Airways. In 1932, JRD Tata founded Tata Airline, the first
Indian airline. At the time of independence, nine air transport companies were carrying both
air cargo and passengers. These were Tata Airlines, Indian National Airways, Air service of
India, Deccan Airways, Ambica Airways, Bharat Airways, Orient Airways and Mistry
Airways. After partition Orient Airways shifted to Pakistan.

In early 1948, Government of India established a joint sector company, Air India
International Ltd in collaboration with Air India (earlier Tata Airline) with a capital of
Rs.2,00,00,000/- and a fleet of three Lockheed constellation aircraft. The inaugural flight of
Air India International Ltd took off on June 8, 1948 on the Mumbai-London air route. The
Government nationalized nine airline companies vide the Air Corporations Act, 1953.
Accordingly it established the Indian Airlines Corporation (IAC) to cater to domestic air
travel passengers and Air India International (AI) for international air travel passengers. The
assets of the existing airline companies were transferred to these two corporations. This Act
ensured that IAC and AI had a monopoly over the Indian skies. A third government-owned
airline, Vayudoot, which provided feeder services between smaller cities, was merged with
IAC in 1994. These government-owned airlines dominated Indian aviation industry till the
mid-1990s.

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Fund Flow Analysis

In April 1990, the Government adopted open-sky policy,it means unrestricted access by any
carrier into the sovereign territory of a country without any written agreement specifying
capacity, ports of call or schedule of services. In other words an Open Skies policy would
allow the foreign airline of any country or ownership to land at any port on any number of
occasions and with unlimited seat capacity. There would be no restriction on the type of
aircraft used, no demand for certification, no regularity of service and no need to specify at
which airports they would land. Defined in this manner, it is not surprising that Open Skies
policies are adopted only by a handful of countries, most commonly those that have no
national carriers of their own and that have only one or two airports. No sovereign country of
any eminence practices Open Skies least of all the European Union, UK, USA, Japan,
Australia or countries in South East Asia.and allowed air taxi- operators to operate flights
from any airport, both on a charter and a non-charter basis and to decide their own flight
schedules, cargo and passenger fares. In 1994, the Indian Government, as part of its open sky
policy, ended the monopoly of IA and AI in the air transport services by repealing the Air
Corporations Act of 1953 and replacing it with the Air Corporations (Transfer of
Undertaking and Repeal) Act, 1994. Private operators were allowed to provide air transport
services. Foreign direct investment (FDI) of up to 49% equity stake and NRI (Non Resident
Indian) investment of up to 100% equity stake were permitted through the automatic FDI
route in the domestic air transport services sector. However, no foreign airline could directly
or indirectly hold equity in a domestic airline company.

By 1995, several private airlines had ventured into the aviation business and accounted for
more than 10% of the domestic air traffic. These included Jet Airways Sahara, NEPC
Airlines, East West Airlines, Modi Luft Airlines, Jagsons Airlines, Continental Aviation, and
Damania Airways. But only Jet Airways and Sahara managed to survive the competition.
Meanwhile, Indian Airlines, which had dominated the Indian air travel industry, began to lose
market share to Jet Airways and Sahara. Today, Indian aviation industry is dominated by
private airlines and these include low cost carriers such as Deccan Airlines, Go Air and Spice
Jet etc, who have made air travel affordable.

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Fund Flow Analysis

Airline industry in India is plagued with several problems. These include high Aviation
Turbine Fuel (ATF) prices, rising labor costs and shortage of skilled labor, rapid fleet
expansion, and intense price competition among the players. But one of the major challenges
facing Indian aviation industry is infrastructure constraint. Airport infrastructure needs to be
upgraded rapidly if Indian aviation industry has to continue its success story. Some steps have
been taken in this direction. Two of India's largest airports-Mumbai and New Delhi-were
privatized recently. Two Greenfield airports are coming up at Bangalore and Hyderabad in
southern India. Investments are pouring into almost all aspects of the industry, including
aircraft maintenance, pilot training and air cargo services. The future prospects of Indian
aviation sector look bright.

Airlines:
Size:-Of a total number of 454 airports and airstrips in India, 16 are designated as
international airports. The Airports Authority of India (AAI) owns and operates 97 airports. A
recent report by Centre for Asia Pacific Aviation (CAPA), Over the next 12 years, India's
Civil Aviation Ministry aims at 500 operational airports. The Government aims to attract
private investment in aviation infrastructure. India has been witnessing a very strong phase of
development in the past few months. Many domestic as well as international players are
showing interest in the growth and development of the aviation sector with immense focus on
the development of the airports. Indian private airlines Jet, Sahara, Kingfisher, Deccan,
Spicejet - account for around 60% of the domestic passenger traffic. Some have now started
international flights. For the next years to come India is poised with strong focus on the
development of its airport to meet the international standards. The government is planning
modernization of the airports to establish a standard. The newly developed airports will help
releasing pressure on the existing airport in the country
Plans:-A projected investment of USD 8.5 billion has been planned for the development of
Indian airports during the 11th plan. Mumbai and Delhi airports have already been privatized.
These two airport are being upgraded at an estimated investment of US$ 4 billion for the
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Fund Flow Analysis

period 2006-16. Development of airport infrastructure is a focus area for the Government.
There has been a significant uptrend in domestic and international air travel.
AAI has planned a heavy investment of USD 3.07 billion over the next five years. Out of it
43 per cent will be for the three metro airports in Kolkata, Chennai and Trivandrum. The rest
will be invested in upgrading other non-metro airports and in the modernization of the
existing aeronautical facilities.

Passenger traffic is projected to grow at a CAGR of over 15% in the next 5 years. It is

estimated that the data will cross 100 million passengers per annum by 2016
Cargo traffic to grow at over 20% per annum. over the next five years, crossing 3.3

million tonnes by 2016

Major investments planned in new airports and up gradation of existing airports
100% FDI is permissible for existing airports; FIPB approval required for FDI beyond

74%.
100% FDI under automatic route is permissible for greenfield airports.
49% FDI is permissible in domestic airlines under the automatic route, but not by

foreign airline companies.

100% equity ownership by Non Resident Indians (NRIs) is permitted.
AAI Act amended to provide legal framework for airport privatization.
100% tax exemption for airport projects for a period of 10 years.
Open Sky Policy of the Government and rapid air traffic growth have resulted in the
entry of several new privately owned airlines and increased frequency/flights for
international airlines.

Initiatives:-The Committee on Infrastructure has initiated several policy measures that

would ensure time-bound creation of world-class airports in India. A comprehensive civil
aviation policy is on the anvil. An independent Airports Economic Regulatory Authority Bill
for economic regulation is also under consideration.

The policy of open skies introduced some time ago has already provided a powerful

spurt in traffic growth that has exceeded 20% per annum during the past two years.
Major airports such as Chennai and Kolkata are also proposed to be taken up for

modernization through the PPP route.

To ensure balanced airport development around the country, a comprehensive plan for
the development of other 35 non-metro airports is also under preparation. These

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Fund Flow Analysis

measures are expected to bring a total investment of Rs. 40,000 crore (USD 8.312

billion) for modernization of the airport infrastructure.

A Model Concession Agreement is also being developed for standardizing and

simplifying the PPP transactions for airports, on the analogy of the highways sector.
This would include upgrading of the ATC services at the airports. Issues relating to
customs, immigration and security are also being resolved in a manner that enhances

the efficiency of airport usage.

A greenfield airport is already operational at Bangalore and the one at Hyderabad,
built by private consortia at a total investment of over USD 800 million, will be

operational soon.
A second greenfield airport being planned at Navi Mumbai is planned to be developed

using public-private partnership (PPP) mode at an estimated cost of USD 2.5 billion.
35 other city airports are proposed to be upgraded through PPP mode where an
investment of USD 357 million is being considered over the next three years.

Potential:

High demand for investments in aviation infrastructure.

Favorable demographics and rapid economic growth point to a continued boom in

domestic passenger traffic and international outbound traffic.

Greenfield airport projects planned in resort destinations and emerging metros such as

Goa, Pune, Navi Mumbai, Greater Noida and Kannur.

International inbound traffic will also grow rapidly with increasing investment and
trade activity and as Indias rich heritage and natural beauty are marketed to

international leisure travelers.

Modernization / up-gradation of metro airports induction of partners for Chennai,

Kolkata expected subsequently

SME lending, a largely untapped market, presents a significant opportunity. This
accounts for 40% of the industrial output and 35% of direct exports.

Airlines Market Share:Airlines

Air India (Domestic)
Jet Airways

Market Share
(in lakhs)
7.62
7.66

Percentage share
18.2
18.3
Page 5

Seat factor
(in %)
72.9
74.2

Fund Flow Analysis

Jet Lite
Kingfisher
Spice Jet
Paramount
Go Air
IndiGo

3.18
8.98
5.27
0.13
2.46
6.58

7.6
21.4
12.6
0.3
5.9
15.7

Page 6

78.1
75.8
81.0
85.0
78.0
82.4

Fund Flow Analysis

Market Share (in lakhs)

Air India (Domestic)

Jet Airways
Jet Lite
Kingfisher
Spice Jet
Paramount
Go Air
IndiGo

Page 7

Fund Flow Analysis

2. COMPANY PROFILE
3. Air India is the national flag carrier of India with a worldwide network of passenger
and cargo services and also having in-house maintenance, repair and overhaul
capabilities to support its present fleet of owned and leased aircrafts.
4. Air Indias Department of Engineering has obtained the coveted ISO-9002
Certification for its engineering facilities for maintenance of its fleet of Aircrafts and
family of Engines and APUs - also included are such services provided at other
operators and customers
5. The crucial function of procurement of spares, components and related materials
required for the maintenance of Air Indias entire fleet of aircrafts and Customer
Engines is performed by the Aircraft Spares Procurement Group of Materials
Management Department in close coordination with Materials Planning Division of
Engineering Department, Regional Offices of MMD at New York and London, Cargo
Offices and Freight Forwarders at various On-line Stations, Finance Department and
large spectrum of Vendors from all over the world.
6.

a. Background and inception of the company:

7. The national flag carrier of India with a worldwide network of passenger and cargo
services, Air India is the only government-owned airline in the country, having
recently merged with Indian Airlines. 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. Air India plans to join Star Alliance and has ordered 27 Boeing 787 (+7
options), to be delivered after 2015.
8.
In 1932, Air India began its journey under the aegis of Tata Airlines, a division of
Tata Sons Ltd. (now Tata Group). Following World War II in 1946, regular
commercial service was restored in India and Tata Airlines became a public limited
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Fund Flow Analysis

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.
9.
In 2013, the Government of India announced that Indian would be merged into Air
India. As part of the merger process, a new company called the National Aviation
Company of India Limited (now called Air India Limited) was established, into which
both Air India (along with Air India Express) and Indian (along with Alliance Air)
would be merged. Once the merger was completed, the airline - called Air India would continue to be headquartered in Mumbai and would have a fleet of over 130
aircraft.
10.

b. Nature of Business Carried:11. Air India Limited mainly concentrated on aviation sector and few other services
which is separately maintained and managed by Air India Limited. It has its own
subsidiaries. They are as follows:
12.
Air India Air Transport Services Limited (AIATSL)
13. Air India Air Transport Services Limited (AIATSL) is a Public Sector
Undertaking (PSU) of the Government of India. AIATSL is a subsidiary of Air
India and is headquartered in Mumbai, India. The company provides ground handling
services (cargo, passenger, baggage) at various airports in India. The Company has
authorized Share Capital of Rs.500 crores divided into 42,56,36,820 Equity Shares of
Rs.10/- and 74,36,318 Redeemable Preference Shares of Rs.100/- each and present
paid-up capital comprises 15,38,36,427 fully paid equity shares of Rs.10/- each
amounting to Rs.153.84 Crores

Air India Charters Limited (AICL)

14. Air India Charters Limited (AICL) is a Public Sector Undertaking (PSU) of the
Government of India. Headquartered in Mumbai, India, this subsidiary of Air India
operates low cost carrier Air India Express from India to the Gulf and Southeast Asia.
AICL operates flights from airports in Kerala, Punjab and Mangalore to Dubai, Abu
Dhabi, Al Ain, Muscat and Salalah in the Middle East and Singapore in the east. Air
India Charters has charters flying throughout India. It works with other charter
Page 9

Fund Flow Analysis

companies including VibhaLifesavers for air ambulance and Hi Flying aviation for
its general charters in India.
15.
16.
17.
Air India Engineering Services Limited:
18. It is one of the subsidiaries which provides assistance to the Air India Limited., That
is helps in ground handling services and other services
19.
Hotel Corporation of India Limited:
20. The company has authorized Share Capital of Rs. 41 croresdividend into 41,00,000
Equity Shares of 100/- each and its present paid up capital comprises of 40,60,000
fully paid up equity shares of Rs.100/- amounting to Rs.40.60 crores. The entire share
capital of the company is held by Air India Ltd and its Nomimees.

21.
c. VISION, MISSION and QUALITY POLICY
22.Companys Mission:
To be rated among the top five airlines in Asia Pacific by customers and distribution
partner
Effective and efficient services to passengers.

23.Companys Vision:
To rationalize all business processes around passenger and departure control
applications using industry standards with a view to enhance revenues and reduce
cost.
Upgrade participation levels with various Global Distribution System (GDS) to the
highest level.
Provide for various modes of booking and check-in and thus extend the convenience
to the customers.
Timely and accurate revenue determination per flight departure due to uplift of eticket coupons and speedier interline settlements.
Ensure that NACIL hosted system has incorporated latest Industry Standards (IS)
changes relevant for all PSS applications as per requirements.
Provide the customers using the airline IBE for passenger services an experience to
cherish.

Page 10

Fund Flow Analysis

Provide a world class Frequent Flyer system with comprehensive interface with other
frequent flyer systems of Global Alliances partner airlines.

24.

Quality Policy:

ISO-9002 Certification for its engineering facilities for maintenance of its fleet
Assist the Sectional heads in purchase of project related equipments,
Preparation of management reports and budgetary controls.
Participation in review meetings and deliberations in appropriate Forums.
Interact with System Group in DIT regarding issues encountered in System and their

timely resolution.
Obtain price catalogues from various vendors and update the System.
Assist Sectional and Divisional heads in administration and job Allocation to staff.
Interact with clearing agencies for sea shipments and bulk supplies such as tires,
lubricants, oils, chemicals, etc.
Assist Sectional and Divisional heads in vendor development,performance review,
etc.
Any additional job allotted from time to time.
25.

d. Product and Services Profile:

26.Product Profile:27. Air India mainly concentrated on these following products:

Airline
Ground Handling Services
Hotels
Services

28. Air India has had a number of aircraft in its fleet. Below is a list of current and
former Air India, Tata Sons Aviation Department and Tata Airlines aircraft (includes
leased-in

aircraft):

29.
30.
Page 11

Fund Flow Analysis

31. Fleet:
32. Air India has had a number of aircraft in its fleet. Below is a list of current and
former Air India, Tata Sons Aviation Department and Tata Airlines aircraft (includes
leased-in aircraft):
33. Air India fleet (excl. subsidiaries) as of November 2011:
34. A
i

35.
Air

36. A

37. A

38. A

39. B

40. B

41. B

42. B

43.
Tot

48. 2

f
t

44. I

45.

46. 1

47. 2

24

49. 5

50. 8

51. 1
2

S
e
r
v
i
c
e
54.
55.
Page 12

52. -

53.
89

Fund Flow Analysis

56. Fleet info:57. The Boeing customer code for Air India is 37, meaning a model name of, for example,
a 747-437 (an Air India 747-400). As of May 2016, the average age of the Air India
fleet is 9.5 years.
58. First Boeing 787 is to be delivered in March 2012.
59. Air India's Boeing 787 will be powered by General Electric GEnx.
60. New aircraft orders
61. On 11 January 2006, Air India announced an order for fifty eight jets - eight Boeing
777-200LR Worldliners, twenty-three Boeing 777-300ER and twenty seven Boeing
787-8 Dreamliners
62. The airlines received its first Boeing 777-200LR aircraft on 26 July 2013 and Boeing
777-300ER on 10 October 2013.
63. In April 2016, the airline has orderd three Boeing 777-300ERs.
64.
65.

66.Service Profile:67. Frequent flyer programme:68. Flying Returns is Air India's frequent flyer programme. The programme is also shared
by all other Air India Limited carriers.
69.
Premium lounges:70. The Maharaja Lounge (English: "Emperor's Lounge") is offered to First and Business
class passengers. Air India shares lounges with other international airlines at
international airports that do not have a Maharaja Lounge available. There are
five Maharaja Lounges, one at each of the five major destinations of Air India, which
are as following:
Page 13

Fund Flow Analysis

71. International:

London Heathrow Airport

John F. Kennedy International Airport (New York)

72. India:

Bengaluru International Airport (Bangalore)

ChhatrapatiShivaji International Airport (Mumbai)
Indira Gandhi International Airport (Delhi)
Rajiv Gandhi International Airport (Hyderabad)

73. In-flight entertainment:74. Air India's Boeing 777-200LR/-300ER as well as some refurbished Boeing 747-400
aircraft use the Thales Top Series IFE systems for onboard in-flight entertainment.
Airbus A310s do not have personal LCD screens. Airbus A330s have widescreen
displays in Business and Economy classes but no personal IFEs.
75.

Page 14

Fund Flow Analysis

e. Area of Operation Global / National / Regional:
76. Domestic Stations
77.

78. AGARTALA

81.

82. AGATTI

86. AHMEDABAD

90. ALLAHABAD

94. AIZAWL

98. AMRITSAR

102.

AURANGABAD

106.

BAGDOGRA

110.

BANGALORE

11

121.

114.

BHOPAL

99.

100.

LEH

103.

104.

LILABARI

107.

108.

LUCKNOW

111.

112.

MADURAI

115.

116.

MANGALORE

120.

MUMBAI

124.

NAGPUR

128.

PATNA

118.

BHUBANESHWA

122.

119.
4

CHANDIGARH

125.

96. KULLU

117.

95.

113.

92. KOZHIKODE

109.

91.

105.

88. KOLKATA

101.

87.

97.

84. KOCHI

93.

83.
3

89.

80. KHAJURAHO

85.

79.

123.
4

126.

CHENNAI

127.

Page 15

Fund Flow Analysis

1

129.

130.

COIMBATORE

133.

134.

DELHI

138.

DIBRUGARH

142.

DIMAPUR

146.

GAYA

150.

GOA

154.

GUWAHATI

158.

GWAILOR

162.

HYDERABAD

166.

IMPHAL

170.

INDORE

RAIPUR

147.

148.

RANCHI

151.

152.

SHILLONG

155.

156.

SILCHAR

159.

160.

SRINAGAR

163.

164.

SURAT

167.

168.

TEZPUR

171.

172.

THIRUVANANTHAPURAM

176.

TIRUCHIRAPALLI

180.

TIRUPATI

174.

JABALPUR

177.

144.

173.

143.

169.

PUTTAPARTHI

165.

140.

161.

139.

157.

PUNE

153.

136.

149.

135.

145.

PORT BLAIR

141.

132.

137.

131.

175.
5

178.

JAIPUR

179.
5

Page 16

Fund Flow Analysis

181.

182.

183.

JAMMU

185.

186.

187.

JAMNAGAR

190.

191.

JODHPUR

VADODARA

192.

VARANASI

196.

VISAKHAPATNAM

194.

195.

JORHAT

197.

188.

193.

UDAIPUR

189.

184.

198.

199.

KANPUR

200.

201.
202.
203.

International stations
204.

205.

BAHRAIN

207.

208.

BANGKOK

212.

COLOMBO

216.

DHAKA

220.

DOHA

224.

DUBAI

228.

FUJAIRAH

209.
213.
217.
221.
225.
229.

MALE

222.

MUSCAT

226.

RAS-AL-KHAIMAH

230.

SHARJAH

234.

SINGAPORE

238.

YANGON

16

232.

233.

KABUL

235.

218.

15

231.

LAHORE

14

227.

214.

13

223.

KUWAIT

12

219.

210.

11

215.

KUALA LUMPUR

10

211.

206.

17

236.

237.

KATHMANDU

18

239.
240.
241.

Stations operated by Code Share flights

242.

CHITTAGONG

Page 17

Fund Flow Analysis

243.

244.

DHAKA

246.

TASHKENT

245.
3

247.
248.

Offline Stations

249.
251.
253.
255.
257.
259.
261.
263.
265.
267.

1
2
3
4
5
6
7
8
9
1

250.
252.
254.
256.
258.
260.
262.
264.
266.
268.

AGRA
BHAVNAGAR
BHILAI
BHUJ
DARJEELING
DEHRADUN
DHARAMSALA
HUBLI
JAISALMER
MYSORE

270.

RAJKOT

272.

SHIMLA

274.

VIJAYAWADA

269.
1

271.
2

273.
3

275.
276.
277.
278.

f. Ownership Pattern:
279.

Authorised:-The company currently having 4,875,645,020 Equity shares of

Rs.10 each (Previous Year 1,375,645,020 Equity shares) & 12,440,498 Redeemable
Preference Shares of Rs.100 each (Previous Year 12,440,498 Redeemable Preference
shares)
280.

Issued, Subscribed and Paid up:-945,000,000 Equity shares of Rs.10

each fully paid up (Previous Year 145,000,000 Equity Shares) & (Of the above
144,950,000 Equity Shares were issued pursuant of Amalgamation)
Page 18

Fund Flow Analysis

281.
g. Competitors Information:
282.

Air India Limed having following competitors:

Jet Airways
British Airways
King Fisher
Emirates

283.

Jet Airways

284.

Logo

286.

Parent

Company
288.
Sector
290.
Tagline/
Slogan
292.
USP
294.
STP
295.
Segment
297.
Target
Group
299.
Positioning
301.
SWOT Analysis
302.
Strength

285.
287.

Tailwinds Limited

289.
291.

Airlines
The Joy of Flying

293.

Premium Airline, High Class

296.
298.

Passengers preferring comfort

Corporate, Upper Middle Class

300.

Premium

303.

1. Has created a good image among the Indian

fliers
304.
306.

Weakness
Opportunity

2. Trusted Airline by the Corporates

305.
1. Competition from the LCCs
307.
1. Strongly positioned in the International
routes

308.

312.
313.

Threats

Competition
Competitors

2. Has presence in every segment

309.
1. LCCs eating up the market share
310.

2. Rising Fuel Costs

311.

3. Rising Labour Costs

314.

1.Kingfisher

2.Air India

315.

316.

British Airways
Page 19

Fund Flow Analysis

317.

Logo

319.

Parent

318.
320.

International Airlines Group

Company
321.
Sector
323.
Tagline/

322.
324.

Airlines
To fly. To serve. The world's favourite airline;

Slogan
325.
USP

Upgrade to British Airways

326.
Premium Airline, Upper Middle Class, Middle
Class

327.
328.
330.

STP
Segment
Target

Group
332.
Positioning
334.
SWOT Analysis
335.
Strength

339.
341.

329.
331.

Passengers Preferring Comfort / reliability

Corporates / Upper Middle Class / Middle

Class
333.
Premium
336.

1. Strong Backing of UK Govt

337.

2. Strong Hub in UK

338.

3. Strong brand presence and excellent global

Weakness

presence
340.
1. Severe Competition from Cash Rich Middle

Opportunity

Eastern Airlines
342.
1. The Heathrow Terminal is a major hub
across the world and it has a major presence here

344.

348.
349.

Threats

Competition
Competitors

343.
345.

2.Expanding its global operations

1. Rising Fuel Costs

346.

2. Rising Labour Costs

347.

3. Increasing Competition in European Market

350.

1.Virgin

2.British
3.Lufthansa
4.Emirates
5.Jet Airways

351.

352.

Kingfisher Airlines

353.

Logo

355.

Parent

354.
356.

United Breweries Group

Page 20

Airlines
Midland

Fund Flow Analysis

Company
357.
Sector
359.
Tagline/
Slogan
361.
USP
363.
STP
364.
Segment
366.
Target
Group
368.
Positioning
370.
SWOT Analysis
371.
Strength

358.
360.

Airlines
Fly The Good Times

362.

Premium Airline, High Class

365.
367.

Passengers preferring comfort

Corporate, Upper Middle Class

369.

Premium

372.

1. Has created a good image among Indian

fliers
Weakness

2. Strong backing from promoters

374.
1. Heavy Debt

376.

Opportunity

375.
377.

378.

Threats

Indian skies
379.
1. LCCs eating up the marketshare

373.

2. Poor On time Performance

1. Reputation of providing the best amenities in

380.

2. Rising Fuel Costs

381.

3. Rising Labour Costs

384.

1.Jet Airways

385.

2.Air India

389.
391.

The Emirates Group

Company
392.
Sector
394.
Tagline/

393.
395.

Airlines
Be good to yourself, Fly Emirates; Fly

Slogan
396.
USP

Emirates. Keep Discovering

397.
Premium Airline, Upper Middle Class, Middle

382.
383.

Competition
Competitors

386.

387.

Emirates

388.

Logo

390.

Parent

Class
398.
399.
401.

STP
Segment
Target

Group
403.
Positioning
405.
SWOT Analysis

400.
402.

Passengers Preferring Comfort / reliability

Corporates / Upper Middle Class / Middle

Class
404.
Premium
Page 21

Fund Flow Analysis

406.

Strength

407.

1. Strong Backing of Dubai Govt

408.

2. Advantage of Being Present in Oil Rich

Emirate
409.

3. Strong Hub in Dubai

410.

4. Satisfied Customer and Preferred Airline of

Weakness

Customers
412.
1. Relying Heavily on International Onward

Opportunity

Moving Traffic
414.
1. Brand New Fleet. Leverage this and also

415.

Threats

improve the customer confidence in the airline

416.
1. Increasing Competition in Middle East

417.
418.

Competition
Competitors

411.
413.

Market
419.

1.Etihad

420.

2.Qatar Airways

421.

3.Jet Airways

422.

4.Air India Express

423.
424.
425.
426.

h. Infrastructural Facilities:
427.
Air India is the 16th largest airline in Asia. Its commitment to build Your
Palace in the Sky i.e., Air Indias sincere slogan, virtually comes true. The national
airline of India carries the day despite the financial crisis casted a long shadow. Flies
from its main base Mumbai, Air India connects a worldwide network of passenger and
carries out cargo services in over 100 cities around the globe. Air India is persistent on
giving seamless flying service to wide network of passengers.
428.
There are different approach are there to developing infrastructure. It is not enough to
state what we want and allocate funds. For the Old Guard, who see an aspirational
statement with budgetary allocations as the panacea, to comprehend this requires a true

Page 22

Fund Flow Analysis

paradigm shift, as with Newton and the apple. A new social paradigm, as it were, so that
we learn to set realistic goals, makes practicable work plans, and then executes them.
429.
430.
This applies to first-order infrastructure, such as energy, transport, and
communications, as also to second-order infrastructure that we lack, or where processes
need rationalization, as in selling agricultural produce across the country, or getting
aviation fuel at the same price everywhere. These second-order elements are:
i)

ii)

Organized markets as integrated, end-to-end chains from input and

production, to transportation and storage, to marketing and distribution,
including all taxation, and
finance, including insurance.

431.
432.

i. Awards and recognitions

Preferred International Airline award for travel and hospitality from Awaz Consumer
Awards 2006
Best International West Bound Airline out of India for three successive years by
Galileo Express Travel World Award
Best Corporate Social Responsibility Initiative. by Galileo Express Travel World
Award
Best Short-Haul International Airline by Galileo Express Travel World Award 2014
The Mercury Award for the years 1994 and 2003, from the International Flight
Catering Association, for finest in-flight catering services.
Amity Corporate Excellence Award instituted by the Amity International Business
School, Noida, Uttar Pradesh to honour Corporates with distinct vision, innovation,
competitiveness and sustenance.
Readers Digest Trusted Brand Award
Dun and Bradstreet Award (D&B)- first in terms of revenue out of the top airline
companies out of India
Best South Asian Airline award by readers of TTG Asia, TTG China, TTG Mice and
TTG-BT Mice China, all renowned Mice and business travel publications.
Cargo Airline of the Year at the 26th Cargo Airline of the Year Awards
The airline entered the Guinness Book of World Records for the most people
evacuated by a civil airliner. Over 111,000 people were evacuated from Amman to
Mumbai a distance of 4,117 km, by operating 488 flights in association with Indian,
Page 23

Fund Flow Analysis

from 13 August to 11 October 1990 lasting 59 days. The operation was carried out
during Persian Gulf War in 1990 to evacuate Indian expatriates from Kuwait and Iraq.
The Montreal Protocol Public Awareness Award was awarded to Air India by
the United Nations for environmental protection, especially in the ozone layer.
World's first all-jet airline- June 1962
World's largest operator of Airbus A310-300
Air India's security department became the first aviation security organization in the
world to acquire ISO 9002 certification (31 January 2001).
Air India's Department of Engineering has obtained the ISO 9002 for its Engineering
facilities for meeting international standards.
433.
434.
435.
436.
437.
438.

j. Work Flow Model (End to End):-

Page 24

Fund Flow Analysis

439.

C R
H R
PP
O
E
O
E OC
C R
V
V
IF
D I
E
Q K
IICN
S
D
E
HM
F
L
I
G
U
R
A
V
S
F
L
I
J
H CI
CS EAE
E
A T
U
G
H
O
C
O
H
S K T
L
AH
E
T
U
E
S
E IB
TR C N
E
I
T
D
E
R
D FA
O N
D
C
S
E
RI
L
I
I
T
A
N
U
P
C
K
L
I
VC
A
T I
T
YR S
C L
EM
E E
G
I
O
N S
K
Y
OP N
H
A T
Y
E
TO
U ATF
T TI
RO
N
DT
I
C
U
EL K
E
G
G
P
T
G O
AA B
E
R O
K
E
TV
F
L
I
R
I
U
G
H
F
I
R
T
A E
EC R
T
I U Page 25
Q
O
E
S N
T
P
A
Y

N
S

T
E

E
C
Fund Flow
Analysis
T
F
L
GGrowth and Prospects:
H
k. Future
T

l. Air India flies out stranded passengers from Leh: Air India operated three special
flights between Delhi and Leh on Sunday, 8th August 2016 to evacuate stranded tourists
and passengers from Leh.

m. Air India opens franchise for Pratt & Whitney Eco Power Engine washing: The
National Aviation Company of India Ltd, operating under the brand name Air India, has
signed an agreement with Pratt & Whitney to establish an Eco Power engine wash
service at Mumbai International Airport.

n. Air India - Melbournes newest international airline: Melbourne Airport welcomed

Air Indias announcement that they will commence daily direct services from Melbourne
to Delhi from November 1 this year.

o. Air India & MADC sign Land Lease Agreement for aircraft maintenance base at
Nagpur: Air India and Maharashtra Airport Development Company Ltd. (MADC), on
8th June 2016, has signed a Land Lease Agreement for 50 acres of land in the SEZ area
near Nagpur Airport.

p. Air India has resumed the normal schedule of operations: Air India has resumed the
normal schedule of operations across the entire network from today; with the total
passenger bookings on the IC coded flights crossing 32,000.
q. Air India signs agreement to become GEnx service provider:GE Aviation and Indias
national carrier Air India have signed a GE Branded Services Agreement (GBSA) under
which GE Aviation will provide technical support as Air India offers maintenance, repair
and overhaul (MRO) services for the GEnx-1B engine and further advances its plans to
become a global MRO service provider.

r.
s. Air India Airbus 320 lands at India Aviation:The first of the new generation Airbus
A320 aircraft on order joined the Air India fleet today, with the arrival of a mint fresh
aircraft at Begumpet Airport, Hyderabad, where India Aviation 2016, Indias first civilian

Page 26

Fund Flow Analysis

air show is on. The aircraft also becomes the 74th own aircraft of the 111 on order, to
join Air Indias fleet.
t. Ex-Im Bank, Air India conclude $1 billion financing transaction: The Export-Import
Bank of the United States (Ex-Im Bank) and the National Aviation Company of India
Ltd. (NACIL, also known as Air India) today held a signing ceremony to celebrate the
$1.1 billion Ex-Im Bank-supported financing of U.S.- manufactured aircraft sold by The
Boeing Co. to NACIL.
u. Air India registers all round Improvement in performance: An impressive increase
of 24.8 per cent in passenger carriage and 14.4 per cent rise in load factor reflects a
significant improvement in Air Indias operating performance in the quarter OctoberDecember 2015, as compared to the same period last year.
v. Air India to remain merged entity: The merger of Air India (erstwhile) and Indian
Airlines was approved by the Government on 1 March, 2013 and a new company vis.
National Aviation Company of India Limited (NACIL) was incorporated on 30 March,
2013 with the brand name of Air India. The merger of two airlines was envisaged to
provide following benefits.
w. Air Indias Engineering achieves significant financial gains: Air India has assembled,
tested and delivered CF6 80C2 Engine S/No: 695 296 belonging to a Customer routed
through Aerostar, earning approx. USD 300,000 in December 2015. Air India had
recently entered in to a strategic marketing alliance with Aerostar Asset Management, a
Dubai based Company, to form The A Team for providing Engine repair management
solutions to Operators in the Gulf and Middle East region to begin with.
x. Air India: Deployment of new aircraft helps increase carriage in 2015: The Year
2015 will undoubtedly go down in the history of civil aviation in India, and globally, as
one of the worst years.
y. Air India to operate special flights to Port Blair, Goa for tourists: Air India will
operate additional flights to augment capacity to popular holiday destinations - Port Blair
and Goa, thus ensuring that tourists from various States of India and all over the world,
are not disappointed for want of seats on a flight. With scheduled flights of all airlines

Page 27

Fund Flow Analysis

being booked during this peak season, Air India has stepped in by deploying additional
capacity.

z.
440.

McKinsey 7S Model:

aa. A model of organizational effectiveness that postulates that there are seven internal
factors of an organization that needs to be aligned and reinforced in order for it to be
successful. The 7S Model was developed at McKinsey & Co. consulting firm in the early
1980s by consultants Tom Peters and Robert Waterman, authors of the management
bestseller "In Search of Excellence."

Page 28

Fund Flow Analysis

ab.

1. Strategy
ac. The concept of strategy includes purposes, missions, objectives, goals and major actions
plans and policies. They are as follows:
ad. Aggressive pricing: Air Indias economy-class passengers can upgrade to business class
by paying Rs. 4,000 for distances up to 750km and Rs.6000 for longer distances at the
counters in 17 airports

Page 29

Fund Flow Analysis

ae.
af. Turnaround Strategy:
ag. The government will soon spell out a comprehensive turnaround plan for flag carrier Air
India, which is burdened with a cumulative loss of Rs.22,165 crore and struggling to
even pay wages to employees, parliament was informed Friday."There are two plans
under consideration -- one is the turnaround plan and the other is a financial restructuring
plan which is being considered by a group of ministers,"

ah.
ai. Strategic Relationships:

Strategic Alliance with Lufthansa (LH)MOU signed in August 2003

Joint capacity plan till 2013
Additional frequencies AI : 22 (18 via Frankfurt to USA) - LH: 15LH to provide AI
commercially viable slots at Frankfurt19 slot pairs provided till winter 2004 (in

exchange for 4 additional frequencies)

Reciprocal World-wide Free Flow Code Share & FFP Cooperation under

implementation
Special Prorate Agreement implemented in November 2003
Cooperation in IT/MRO/Cargo being pursued
Air India developing relationship with other Star Alliance partners United Airlines

& Air Canada Joint Marketing

Special Prorate Agreement
Reciprocal code share
FFP cooperation
Will pursue FFP cooperation with other domestic airlines in India togenerate

incremental revenue streams

Will continue existing code shares with existing 14 airline partners & pursue such

relationships with other airlines

May also consider becoming a full-fledged member of a globalalliance in the future

aj.
2. Structure:-

Page 30

Fund Flow Analysis

ak. Air India Ltd., extended its operations all over the world and the quality services
improves by dividing and sub allocation of duties and responsibilities to their each
department heads and sub-ordinates. The Air India Ltd., functions are flow from
superiors to sun-ordinates.

al.
am.
an.
ao.
ap.

Page 31

Fund Flow Analysis

aq.
3. System:
4. Air India Ltd., providing quick response and fast services to their customers and to
survive in aviation industry by competing with other Airlines. So they are using these
technologies and set of procedures to handling the customers as well as their

5.

employees.
Ground Handling
Information Technology
Security
CargoTechnology Up gradation
IT Projects
Revenue Management
PROS implemented
Ticketing Time-Limit software implemented
Direct connect with GDSs
Integrated computerization system for MMD
Disposal of surplus/redundant inventory
Implementation of Unit Load Device management system
Disaster recovery site at remote location
Air India Express IT Infrastructure
Data Mart for CRS sales data
Ramp Assistance Billing System for GSD/Finance
Online Financial Information System (FINESS)

6. Style:

Page 32

7.

This is one of the domestic airlines in India offering an extensive network of

cargo and passenger services. This airline company was honored a 4 star rating for its
safety and cabin procedures from Skytrax airline for its best basic and luxury
comfort.Flights to Air India can be booked conveniently to various destinations.
International tickets are also easily available, besides the air fares from the US to India
is economical in comparison to other carriers. Air India is popular amidst NRIs
traveling to India for holidays.

8. Staff:
9. Staff is one of the important asset for every company who having the innovative ideas
in the operations of the company by their smart and skillful work and very difficult to
retain them in the organizations.
10.
Increased manpower productivity
Comprehensive HR Policy with focus on Motivation, Training & Development,

Multi-skilling, Scientific
job description & objective performance appraisal Special dispensations obtained

from DGCA Operating Crew Increased Flight Time Limits

Settlement to be reached with pilots
Cabin Crew - Executive crew to fly as per DGCA time-off
Regulations Computerization of Operating/Cabin crew scheduling
Out-sourcing/Hiving-off Non-Core activities already out-sourced
Printing Press
Crew/Employee Transport Potential for out-sourcing
Medical Services
Payroll
Revenue Accounting
Canteen
Civil Works Hiving off to subsidiaries

11.

12.Skill:
13. The term skills include those characteristics, which are developed over a period of
time, under result out of the interaction of number of factors, performing certain task
successfully over a period of time, the kind of people in the organization, the top
management style, the organization structure etc.,
14.
15. Negotiation Skills: With the need to reduce costs and squeeze margins in a highly
competitive market, its vital you equip your people with the most effective
negotiation skills. Whether theyre managing complementary income streams or
negotiating contracts with clients, travel agents and partners, this program will

transform their ability to achieve a profitable outcome with each and every deal thats
made.
16.
17. Creative Problem Solving: Airline industry professionals need to be able to generate
novel solutions to manage such economic pressures. This program will dramatically
shift the way your people think about problems, releasing the potential to develop
innovative solutions that inspire business growth.
18.
19. Developing a unified vision for future success: with the pressures facing todays
airline industry, its vital your executives can come together to agree on a strategic
vision that will give your organization the competitive edge.

Our Executive

Development Program is proven to be highly successful at creating a unified

executive team using tailor-made solutions for business success
20.
21.

22.Shared Values:
23. The idea of Shared Values is often confused with value sharing. The former a more
universal presumption about a set of beliefs and the latter a calculated measure of
utility. In a service industry, delivering value to customers demands a highly evolved
understanding of meeting needs and desires. For example, how well does an airline
deliver on an individuals hope to be with family on the holidays? Can that same
airline deliver on another individuals hope to get to a distant meeting and back for
another commitment? Calculating the costs of delivering value is trivial by
comparison, in that the components are concrete, not fuzzy. Air India was able to gain
market share over competitors focusing on being the low-cost airline provider and
inspiring employees to deliver on that shared value. Every decision made at the
corporate level hinges on that principle and the results are clear in their resilience in
spite of the hostile economic climate and changing regulatory environment that daily
challenges their operating costs.
24.
25.

441.
26. Strengths of AIR INDIA:-

SWOT Analysis

 Air India has been the largest air carrier in India in terms of traffic volume and
company assets.
It owns the most updated fleet and competent repairs and maintenance expertise.
Its information systems are advanced and compatible with its operation and service.
It has a good reputation in both international and domestic markets, quality service
and the age-old Goodwill that has still kept it alive in the interests of the rescue
operators.
Has financial backing of the Government
27. Weaknesses of AIR INDIA: Air India is operating across broad international and domestic markets competing
with world leading giant airlines as well as local small operators. This lack of clarity
on the strategic direction largely dilutes its capabilities and confuses its brand within
markets.
Low profitability and utilization of capacity.
Growing Competitor base and entry of Low-Cost Carriers (LCCs)
The airlines high-cost structure and the compulsions of being a public sector unit are
the reasons and it had been making a loss and shall continue to make losses for some
more quarters.
28. Opportunities of AIR INDIA: India airline industry is growing faster and will continue to grow as the GDP
increases, and the trend is predicted to continue once the slowdown recedes.
Worldwide deregulations make the skies more accessible; the route agreement is
easier to be achieved. The number of foreign visitors and investors to India is
increasing rapidly.
Complementary industry like tourism will increase demand for airline service. The
Civil Aviation Ministrys strong regulation and protection provides opportunities for
consolidation and optimization.
Customers are getting wealthier, tend to be less price-conscious and prefer to choose
quality service over cost.
Best time for introducing LCCs
29. Threats for AIR INDIA: Air India faces imminent aggressive competition from world leading airlines and
price wars triggered by domestic players.

 The Indian Railway Ministry has dramatically improved speed and services in their
medium/long distant routes, attracting passengers away from air service, with prices
almost at par with the low cost carriers
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.

46.

Analysis of Financial Statement:

47. PROFIT AND LOSS ACCOUNT FOR THE YEAR OF 2013-14, 2014-15 & 2015-16 (Rupees in
Millions)

48. PARICULARS

49. 2

50. 2

51. 2

52. I.
56. 1.

60. i.

64. ii.

68. 2.

Revenue:
Traffic

Scheduled Services

Others

Handling, Servicing and Incidental

72. Operating Revenue

76. 3.
Others

3-

4-

5-

53.
57.
61. 1

54.
58.
62. 1

55.
59.
63. 1

7,

0,

0,

2.

5.

6.

0
65. 1

0
66. 1

0
67. 1

5,

9,

7,

5.

1.

7.

0
69. 1

0
70. 1

0
71. 1

3,

2,

3,

5.

8.

2.

0
73. 1

0
74. 1

0
75. 1

6,

2,

1,

3.

5.

6.

0
77. 1

0
78. 2,

0
79. 2,

6,

8.

6.

1.
2

0
81. 1

0
82. 1

0
83. 1

2,

4,

4,

4.

3.

2.

85.
89. 3

86.
90. 3

87.
91. 3

2,

3,

3,

5.

8.

7.

employees

including Crew Allowances

0
95. 9

93. 8

94. 8

4.

1.

1.

3
97. 6

8
98. 7

0
99. 5

2,

0,

0,

5.

6.

0.

0
103.

80. Total Revenue

84. II.
Expenses:

88. 1.

92. 2.

96. 3.

100.

Payments

to

and

Provisions

for

Insurance

Aircraft Fuel and Oil

4.

Navigation, Landing, Housing

and Parking
104.
5. Aircraft Material Consumed

101.

102.

9,698.

9,290.

10,60
4.

0
105.

0
106.

0
107.

9,583.

5,560.

4,262.

108.

112.

116.

120.

6.

7.

8.

9.

Outside Repairs Aircraft

Hire of Aircraft

Handling Charges

Passenger Amenities

124.

10. Booking Agency Commission

128.

11. Communication Charges:

132.

i.

Reservation Systems

136.

ii.

140.

12. Travelling Expenses:

144.
148.

i.
ii.

Others

Crew
Others

0
109.

0
110.

0
111.

7,196.

5,533.

8,031.

0
113.

0
114.

0
115.

13,77

15,22

11,77

7.

5.

4.

0
117.

0
118.

0
119.

5,460.

5,290.

6,045.

0
121.

0
122.

0
123.

5,929.

4,865.

4,838.

0
125.

0
126.

0
127.

6,150.

4,360.

4,083.

0
129.

0
130.

0
131.

133.

134.

135.

2,466.

2,456.

3,246.

0
137.

0
138.

0
139.

1,534.

1,667.

1,652.

0
141.

0
142.

0
143.

145.

146.

147.

2,422.

2,571.

2,226.

0
149.

0
150.

0
151.

953.0

1,032.

909.6

8
0

0
154.

0
155.

10,92

13,91

0.

7.

0
157.

153.
8,954.
152.

13. Depreciation

1,
3
3
8.
0
156.

Less: Transfer from Capital Reserve

158.

159.
19.50

162.
1,338.
160.

Add: Transfer to Capital Reserve

161.

165.

0
166.

10,13

13,99

2.

3.

0
169.

0
170.

0
171.

178,5

188,9

165,8

2.

4.

6.

0
173.

0
174.

related to Previous Period

164.

168.

172.
Period

14. Other Expenses

Total Operating Expenses

III.

Loss before Interest, Prior

163.

167.
9,583.

5,

4,

175.

31,78

7.

0.

4.

177.
176.

178.

179.

182.

183.

16,65

24,34

8.

3.

0
186.

Adjustments and Taxation

180.

Add: i. Interest and finance

charges

181.
7,013.

1,056.

184.

ii. Prior Period Adjustments

185.

208.1

Loss before Extra-Ordinary

189.

0
190.

0
191.

(Net)
188.

I.

187.

Items and Taxation

195.
192.

II.

200.

Add: Provision for current tax

i.

Loss before Taxation

Fringe Benefit Tax

208.

ii.

212.

Add: Provision for previous year tax

216.
220.
224.

194.

197.

198.

Less: Extra Ordinary Items (Net)

196.

204.

193.

i.

Wealth Tax

826.6
0

2,

1,

199.

55,50

0.

6.

9.

0
201.

0
202.

0
203.

205.

206.

207.

123.5
209.

122
210.

211.

2.5
213.

14.4
214.

15.4
215.

217.

218.

219.

221.

222.

223.

225.

226.

227.

10,84

15,93

5.

0.

Wealth Tax

Less/Add: Deferred Tax Benefit

i. For Current Year

228.

232.

0
229.

0
230.

231.

233.

621
234.

235.

22,26

55,48

55,52

1.

2.

4.

0
238.

ii. As per AS-11 Notification

IV. Loss after Taxation

22,26
1.
236.

240.

237.

239.

241.

0
242.

243.

22,26

77,74

55,52

1.

4.

4.

Balance Brought Forward

V.

Loss

Carried

Sheet/General Reserve

to

Balance

244.
245.
246.
247.
248.
249.
250.
251.
252.
253.
254. BALANCE

SHEET FOR THE YEAR OF 2013-14, 2014-15 & 2015-16 (Rupees

Millions)

255.

Particulars

256.

257.

258.

2013-

2014-

2015-

in

259.

I.

SOURCES

14
260.

15
261.

16
262.

264.

265.

266.

268.

269.

270.

1,450.

14,50.

9,450.

00
272.

00

00

OF FUNDS:
263.

Shareholders Funds:

267.

a.

271.

Capital

b.

Reserves

and Surplus

.9

275.
279.

Loan Funds:

283.

a.

Secured

Loans

287.

b.

Unsecured

Loans

291.

295.

78,942

Future Lease Obligations

TOTAL

299.

II.

273.

274.

0
276.

633.5
277.

624.8
278.

280.

281.

282.

284.

285.

286.

28,917

23,659

65,907

.5

.5

.1

0
288.

0
289.

0
290.

155,21

168,76

184,76

6.

4.

1.

50

90
293.

10
294.

116,88

133,55

292.

7.

9.

296.

50
297.

60
298.

264,52

311,39

394,30

6.

5.

2.

90
300.

40
301.

60
302.

304.

305.

306.

308.

309.

310.

186,54

243,29

328,41

APPLICATION OF FUNDS:
303.

Fixed Assets:

307.a.

Gross Block

311. Less: Depreciation

5.

4.

0.

60
312.

00
313.

50
314.

18,380

315.b. Net Block

319.c.

Capital Work-in-

Progress

323.

327.

331.

Investments:

Deferred

Tax

Assets

(Net):

335.

Foreign

Currency,

Monetary Items
339.

Translation

Difference

31,990

7,601.

.5

.6

20
316.

0
317.

0
318.

178,94

224,91

296,41

4.

3.

9.

40
320.

50
321.

90
322.

39,726

50,113

24,656

.3

.7

.2

0
324.

0
325.

0
326.

329.

330.

328.

1,231.

1,219.

901.2
332.

80
333.

30
334.

11,873

28,424

28,425

.4

.2

.2

0
337.

336.

1,528.

338.

340.

00
341.

99.50
342.

344.

345.

346.

348.

349.

350.

353.

354.

.1

9,642.

8,677.

0
356.

10
357.

80
358.

26,134

24,731

25,791

Account
343.
347.

Current Assets, Loans and Advances:

352.
351.

355.

359.
Balances

a.

Inventories

b. Sundry Debtors

c.

Cash and Bank

10,016

.1

.0

.1

0
360.

0
361.

10,845

11,396

362.

.0

.4

5,284.

70

363.

d.

Other

Current

Assets

367.

e. Loans and Advances

371.
375.

Less:

Current

Liabilities

and

364.

365.

366.

318.90
368.

561.60
369.

768.10
370.

15,602

11,175

14,466

.1

.9

.5

0
372.

0
373.

0
374.

376.

377.

378.

380.

381.

382.

42,861

42,282

55,466

Provisions

379.

383.

a.

Current Liabilities

b. Provisions

387.

.8

.9

.7

0
385.

0
386.

10,040

10,929

384.
9,234.

.9

.9

30
388.

0
389.

0
390.
394.
-

391.

395.

399.

403.
404.
405.

406.

Net Current Assets

Profit and Loss Account

TOTAL

392.
10,820

11,
393.

40

.0

5,183.

8.

0
396.

20

40
398.

22,261

54,890

.6

397.

.9

0
400.

401.

0
402.

264,52

311,39

394,30

6.

5.

2.

90

40

60

407.

408.
A. GENERAL INTRODUCTION
409.
410.

Air India takes the fund flow statement to analyze the funds from the various

resources, their application of the funds and the uses of the statement for their further
verification. The company uses the statement of sources and application of funds to
show the difference between the aggregate of sources and total application as either
increase or decrease in working capital. This variation in working capital can be
verified by preparing a unlike statement of sources and application, it is prepared with
the help of current assets and current liabilities.
411.
412.
To certain extent it acts as a measuring tool of income and expenditure, fund
flow are used as a base for the financial planning and budgeting and to the companys
warning agent i.e., indicates the financial dangers a heading the company.
413.

414. FUND FLOW STATEMENT {OR} FUNDS MANAGEMENT:

415.

Balance sheet and profit and loss account two most important financial

statements which are prepared at the end of the financial year. Balance sheet shows
financial position of undertaking i.e. assets and liabilities, as on a particular data.
416.
The profit and loss account shows the results of operations i.e., profit or loss
during the financial year.
417.
In the course of business operations, various assets, liabilities and capital
undergo various changes during the financial year. The knowledge of such changes
and reasons of these changes is extremely useful to management of the Company.
Therefore additional statements.
418. Is known as statement of changes in financial position
419.

420.
421.
422.
423. MEANING OF FUNDS:
424.

The term funds has different meanings. However for the purpose of fund

flow statement the term funds means Net working capital also known as Net
current assets it is defined as the difference between current assets and current
liabilities.
425. FUNDS =Current assets- Current liabilities.
426.

427. CURRENT ASSESTS:

428.

The term assets means cash and such other assets which are reasonably

expected to be realized in cash or sold or consumable during the normal operating

cycle of the business.
429.
Thus the term current assets including the following:
430.
1 Cash and bank balance
2 Accounts receivable i.e., debtor and bills receivable
3 Stocks of raw materials [ work in progress and finished goods ]
4 Temporary or short term Investment
5 Prepayment.
6 Accrued income.
431.

432.
433.

CURRENT LIABILITY:
The term current liabilities includes all such obligations which are

likely to mature within one year in the normal course of business operations and
which are paid out of current assets or by creating current liabilities.
434.
The board categories of current liabilities are:
1
Accounts payable i.e., creditors and bills payables
2
Outstanding expenses [E.g.: wages, rent, commission...]
3
Bank overdrafts.
4
Income receivable in advance
5
Dividends payable.
6
Provision for taxation may be current or non current
7
Provision for doubtful debts.
8
Proposed dividends may be current or non current.
435.
436.
Flow of fund arises when the net effect of a transaction is to increase or
decrease the amount of working capital. When a transaction results in increase of
fund, such a transaction is said to be a source of fund. On the other hand, if a
transaction results in the decrease of fund. Such a transaction is said to be an
application of fund.
437.
438.
439.

STATEMENT OF PROBLEM:
440.

As a statutory obligation, every organization has to prepare financial

statements at end of each financial year to know the exact financial position or the
profit position and the capital growth of the organization. The financial statement like
P&L account and Balance sheet gives a summary of companys resources, profits or
losses at a particular period of time. These statements exhibit the financial events
occurred in a given period of time. From this point of view the financial statements
fulfills the objective of organization very well.
441.

442.

But there are certain important financial matters, which can be known only

through analysis of these financial statements. Thus, it is important to know what

funds are available during the period. This underlines the importance of statement
prepared to report movement of funds. Thus the problem taken for study FUND
FLOW ANALYSIS.
443.
444.
445.

OBJECTIVES OF THE STUDY

446.

Funds Flow Statement is an analytical tool in the hands of financial manager.

The basic purpose of this statement is to indicate on historical basis the changes in the
working capital i.e., where funds came from and where there are used during a given
period.
The utility of this statement can be measured on the basis of its contributions to the
financial management. It generally serves the following purposes:447.
1. Analysis of Financial Position: The basic purpose of preparing the statement is to have a
rich into the financial operations of the concern. It analyses how the funds were obtained and
used in the past. In this sense, it is a valuable tool for the finance manager for analyzing the
past and future plans of the firm and their impact on the liquidity. He can deduce the reasons
for the imbalances in uses of funds in the past an take necessary corrective actions. In
analyzing the financial position of the firm, the Funds Flow Statement answers to such
questions as448.
a. Why were the net current assets of the firm down, though the net income was up or vice
versa?
b. How was it possible to distribute dividends in absence of or in excess of current income for
c.
d.
e.
f.
g.
h.

the period?
How was the sale proceeds of plant and machinery used?
How was the sale proceeds of plant and machinery used?
How were the debts retired?
What became to the proceeds of share issue or debenture issue?
How was the increase in working capital financed?
Where did the profits go?
449.
Though it is not an easy job to find the definite answerers to such questions
because funds derived from a particular source rarely used for a particular purpose.
However, certain useful assumptions can often be made and reasonable conclusions
are usually not difficult to arrive at.

450.
2. Evaluation of the Firm's Financing: One important use of the statement is that it evaluates
the firm' financing capacity. The analysis of sources of funds reveals how the firm's financed
its development projects in the past i.e., from internal sources or from external sources. It also
reveals the rate of growth of the firm.
451.
3. An Instrument for Allocation of Resources: In modern large scale business, available funds
are always short for expansion programmes and there is always a problem of allocation of
resources. It is, therefore, a need of evolving an order of priorities for putting through their
expansion programmes which are phased accordingly, and funds have to be arranged as
different phases of programmes get into their stride. The amount of funds to be available for
these projects shall be estimated by the finance with the help of Funds Flow Statement. This
prevents the business from becoming a helpless victim of unplanned action.
452.
4. A Tool of Communication to Outside World: Funds Flow Statement helps in gathering the
financial states of Business. It gives an insight into the evolution of the present financial
position and gives answer to the problem 'where have our resources been moving? In the
present world of credit financing, it provides a useful information to bankers, creditors,
financial, it provides a useful informations and government etc. regarding amount of loan
required, its proposes, the terms of repayment an sources for repayment of loan etc. the
financial manager gains a confidence born out of a study of Funds Flow Statement. In fact, it
carries information regarding firm's financial policies to the outside world.
5. Future Guide: An analysis of Funds Flow Statements of several years reveals certain
valuable information for the financial manager for planning the future financial requirements
of the firm and their nature too i.e. Short term, long-term or midterm. The management can
formulate its financial policies based on information gathered from the analysis of such
statements. Financial manager can rearrange the firm's financing more effectively on the
basis of such information along with the expected changes in trade p payables and the various
accruals. In this way, it guides the management in arranging its financing more effectively.

453.
SCOPE OF THE STUDY
454.

The dissertation contains the profile of the company i.e. Air India Limited

where the dissertation work was undertaken. It contains details regarding how Fund is

managed at Air India Limited and also where fund comes & gone statements at Air
India Limited.
455.
456.
This study gives the information about financial aspects of Air India Limited
from to 2014 to 2016. This study was done in the time duration of 1 year from the
information provided by concerned officials of Air India Limited.
457.
458.
The study of various financial statements through techniques of fund flow
analysis is confined to Air India Limited.
459.
460.
Fund flow analyses of financial performance from financial statement May
guides propose use of available funds, and it gives early warnings of coming financial
dangers. The purpose of funds flow analysis is to calculate net increase or decrease in
working capital of business during a period.
461.
462.
The study has employed three important aspects in order to analyze the
utilization and application of funds, with the help of various graphs.
463.
Funds flow statement
Working capital statement
Ratio analysis
464.
Current ratio
465.
Liquid ratio
466.
467.
468.
469.
470.
471.
472.
473.
474.
475.
476.
477.
478.
479.
480.
481.
482.
483.
484.
485.
486.
487.

488. RESEARCH METHODOLOGY

489.
490. INTRODUCTION:
491.

Research methodology is a way to

systematically solve the research problem. It May

be understood as a science of studying now
research is done systematically. In that various
steps, those are generally adopted by a researcher
in studying his problem along with the logic behind
them.
492.

The procedures by which researchers go

about their work of describing, explaining and

predicting phenomenon are called methodology.
493.
494.
495.
496.
497.
498.
499.
500.
501.

502.
RESEARCH METHODOLOGY
503.
The chief criteria for the validity of any research study lies
in its methodology. An enquiry would prove a failure if it is not
done along certain methodical lines.
504.
505.
The method of study adapted to carry out the dissertation
work is mainly through annual report published on the airlines
site. The study comprises of the companys operations and the
techniques followed by them.
506.
The data extracted from the annual reports of the company
was analyzed and further reduced to tables. To make it pictorial
and easier to grasp and understand the data was represented in
graphical forms.
507.
508. TYPE OF RESEARCH:
509.

This dissertation A Study on fund flow analysis of Air

India ltd. is considered as an analytical research.

510.

Analytical Research is defined as the research

in which, researcher has to use facts or information

already available, and analyze these to make a
critical evaluation of the facts, figures, data or
material.
511.
512.
513.

514.
515.
SOURCES OF THE STUDY:
516.
This is the study entirely based on:
Annual reports
Published sources.
Simple statistical analyses.
517.
518.
There are mainly two types of data sources they are as
follows:
519.
520.
PRIMARY DATA:
521.
The data are originally collected by an investigator
or agency for the first time for a statistical investigation and
used by them in the statistical investigation and used by them in
the statistical analysis and termed as primary data this data are
collected directly from the source for first time.
522.
523.
524.
525.
526.
527.
528.
SECONDARY DATA:
529.
The data published or unpublished which have
already been collected and processed by some agency or person
and take over from there and used by any other agency for their
statistical work and termed as secondary data as for as second
agency is concerned. The second agency if and when it possible
and files one who late uses this data.
530.

531.The major source of data for this dissertation

was collected through annual reports, profit and
loss account of 3 year period from 2014 to 2016 &
some more information collected from internet and
text sources.
532.
533.
534.
535.

Most of the data collected is secondary in nature and

include:
Annual report of the company.
Other books and accounts maintained by the company.
Internet
Text books relating to financial management, management
accounting
536.
537.
538.
539.
540.

SAMPLING DESIGN:

541.Sampling unit

Financial

Statements.
542.

Sampling Size

Last

financial statements.
543.
Tool Used for calculations: - MS-Excel.
544.

three

years

545.
546.
547.
548. TOOLS USED FOR ANALYSIS OF DATA:
549.

The data were analyzed using the following

financial tools. They are

Ratio analysis.
550.
Statement of changes in working capital.
551.
552.
553.
554.
555.
556.
557.
558.
559.
560. LIMITATIONS OF THE STUDY:
The study duration is short.
The analysis is limited to just three years of data study (from year
2014 to year 2016) for financial analysis.

 The

findings

of

the

study

are

based

on

the

information retrieved by the selected unit.

561.
562.
563.
564.
565.
566.
567.
568.
569.
570.
571.
572.
573.
574.
575.

576. ANALYSIS & INTERPRETATION

577.
578.
579.

A.MEANING OF FUND:-

580.
The term fund has a variety of meaning such as cash fund,
capital fund and working capital fund.
581.
1. Cash fund In a narrow sense, fund means only cash.
Cash flow statement portrays net effect of the various business
transactions on cash into account receipts & disbursement of
cash.
582.
This concept of preparing fund flow statement is not
accepted, as there are many such transactions which do not
affect cash but represent the flow of fund.

583.
For example: purchase of furniture on credit does not
affect cash but there is flow of fund.
584.
585.
2. Capital fund Here fund means all financial resources
used in the business, whether in the form of men, money,
material, machine & others.
586.
587.
3. Net working capital -Net working capital means
difference between current asset and current liabilities .Funds
generally refers to cash or cash equivalent or to working capital.
588.
589.
590.
591.
592.

MEANING OF FLOW:-

The term flow refers to changes or transfer and therefore the

flow of funds means transfer of economic values from one
asset to another, from one liability to another, from one asset to
liabilities or vice-versa or a combination of these. So flow of
fund refers to increase or decrease in net working capital.

The increase or decrease in net working capital will take place

only when one account, out of two accounts to be affected in a
transaction ,is a current account i.e. current asset or current
liabilities and the other account is non current account i.e. fixed
asset or long term liability or capital.

When a change in non current account is followed by a

change in another non current account, it does not amount to

flow of fund. It is because, in such case, neither the working

capital increase nor decrease.
593.
594.
595.
596.
597.
598.
599.
600.
601.
602.
603.
604.
605.
606.
607.
608.
609.
610.
MEANING OF FUND FLOW STATEMENT:
611.
612.
Funds flow statement is a statement which discloses the
analytical information about the different sources of a fund
and the application of the same in an accounting cycle. It
deals with the transactions which change either the amount
of current assets and current liabilities (in the form of
decrease or increase in working capital) or fixed assets, longterm loans including ownership fund.
613.
It gives a clear picture about the movement of funds
between the opening and closing dates of the Balance Sheet.
It is also called the Statement of Sources and Applications of
Funds, Movement of Funds Statement; where gotwhere
gone Statement: Inflow and Outflow of Fund Statement, etc.
No doubt, Funds Flow Statement is an important indicator
of financial analysis and control. It is valuable and also helps
to determine how the funds are financed. The financial

analyst can evaluate the future flows of a firm on the basis of

past data.
614.
This statement supplies an efficient method for the
financial manager in order to assess the:
615.
(a) Growth of the firm,
616.
(b) Its resulting financial needs, and
617.
(c) To determine the best way to finance those needs.
618.
In particular, funds flow statements are very useful in
planning intermediate and long-term financing.
619.
620.
621.
622.
623.
624.

DEFINATION OF FUND FLOW STATEMENT:

In the words of Foulke , R.A., a statement of source and

application of fund is a technical device design to analysis the
changes in the financial condition of business enterprises
between two dates.
According to: Almond Coleman, The fund flow statement
summarizing the significant financial changes which were
occurred between the beginning & the end of a companys
accounting periods.
625.
626.
OBJECTIVE OF PREPARING A FUND FLOW
STATEMENT:
627.
628.
The main purpose of preparing a Funds Flow Statement is
that it reveals clearly the important items relating to sources and
applications of funds of fixed assets, long-term loans including
capital. It also informs how far the assets derived from normal
activities of business are being utilized properly with adequate
consideration.

629.
Secondly, it also reveals how much out of the total
funds is being collected by disposing of fixed assets, how much
from issuing shares or debentures, how much from long-term or
short-term loans, and how much from normal operational
activities of the business.
630.
Thirdly, it also provides the information about the
specific utilization of such funds, i.e. how much has been
applied for acquiring fixed assets, how much for repayment of
long-term or short-term loans as well as for payment of tax and
dividend etc.
631.
Lastly, it helps the management to prepare budgets and
formulate the policies that will be adopted for future operational
activities.
632.
633.

ADVANTAGES OF FUND FLOW STATEMENT:-

634.
635.
Funds flow statement is prepared to show changes in the
assets, liabilities and equity between two balance sheet dates, it
is also called statement of sources and uses of funds. Lets look
at some of the advantages of preparing funds flow statement
636.
1. Funds flow statement reveals the net result of operations
done by the company during the year.
637.
2. In addition to the balance sheet, it serves as an
additional reference for many interested parties like creditors,
suppliers, government etc to look into financial position of the
company.
638.
3. It shows how the funds were raised from various
sources and also how those funds were put to use in the
business, therefore it is a great tool for management when it
wants to know about where and from funds were raised and also
how those funds got utilized into the business.

639.
4. It reveals the causes for the changes in liabilities and
assets between the two balance sheet dates therefore providing a
detailed analysis of the balance sheet of the company.
640.
5. Funds flow statement helps the management in deciding
its future course of plans and also it acts as a control tool for the
management.
641.
Funds flow statement should not be looked alone rather it
should be used along with balance sheet in order judge the
financial position of the company in a better way.
642.
643.
644.
645.

LIMITATIONS OF FUND FLOW STATEMENT:-

646.
647.
1. Funds flow statement has to be used along with balance
sheet and profit and loss account, it cannot be used alone.
648.
2. It does not reveal the cash position of the company, and
that is why company has to prepare cash flow statement in
addition to funds flow statement.
649.
3. Funds flow statement merely rearranges the data which
is there in the books of account and therefore it lacks originality.
In simple words it presents the data in the financial statements in
systematic way and therefore many companies tend to avoid
preparing funds flow statements.
650.
4. Funds flow statement is basically historic in nature, that
is it indicates what happened in the past and it does not
communicate anything about the future, only estimates can be
made based on the past data and therefore it cannot be used the
management for taking decision related to future.
651.

652.
653.
654.
655.
656.
657.
658.
659.
660.
661.
662.
663.
664.
665.
666.

Why we prepare fund flow statement?

The balance sheet and income statement are the traditional

basic financial statement of a business enterprise. A serious
limitation of these statements is that they do not provide
information regarding changes in the firms financial
position during a particular period of time. They fail to
answer following question
What funds were available during the accounting period and
for what purpose these funds were utilized?
Have long term sources been adequate to finance fixed asset
purchase?
Does the firm possess adequate working capital?
How much funds have been generated from operations?
Why did the firm not pay dividend in spite of adequate
profit?
The balance sheet is merely a static statement. It is statement
of asset and liabilities of the business as on particular date.

 The fund flow statement overcomes these limitations of basic

financial statement. Fund flow statement will provide us
information about different sources of fund and their
various uses in particular time.
667.
668.
669.
670.
671.
672.
673.

General Rules for Preparing Funds Flow Statement:

674.
675.
The following general rules should be observed while
preparing funds flow statement:
676.
1. Increase in a current asset means increase (plus) in
working capital.
677.
2. Decrease in a current asset means decrease (minus)
in working capital.
678.
3. Increase in a current liability means decrease
(minus) in working capital.
679.
4. Decrease in a current liability means increase (plus)
in working capital.
680.
5. Increase in current asset and increase in current
liability does not affect working capital.
681.
6. Decrease in current asset and decrease in current
liability does not affect working capital.
682.
7. Changes in fixed (non-current) assets and fixed (noncurrent) liabilities affect working capital.
683.
684.
685.

686.

687.
688.
689.
690.
691.

692. Preparation of Funds Flow Statement:

693. Funds flow statement is prepared mainly with the
help of balance sheets of any two successive dates.
Funds flow statement is prepared by comparing the
balance sheets of the two dates and using the income
statement of the year for which the funds flow statement is
being prepared. The following steps are taken for the
preparation of the funds flow statement.
694.
Step-1:
Preparation of statement or schedule of changes in
Net Working Capital:
In the preparation of funds flow statement, the first step is
to find out the net amount of increase or decrease of
working capital, as increase in net working capital is a use
of funds and decrease in net working capital is a source.
Since net working capital is excess of current assets over
current liabilities, the increase or decrease in the net
working capital can be found out by comparing the current
assets and current liabilities contained in the balance
sheets of two following dates. For this purpose, a
statement is prepared which is called statement or
schedule of changes in net working capital. This statement
helps to identify the change in position of the working
capital. While preparing the statement of changes in
working capital, the following points are taken into
account.

(i)

Increase in a current asset, results in increase (+) in working

capital.

(ii)

Decrease in a current asset; result in decreases (-) in

working capital.

(iii)

Increase in a current liability, results in decrease (-) in

working capital.

(iv)

Decrease in a current liability, results in increase (+) in

working capital.

695.

696.
697.
698.
699.
700.
701.

702.

Step-2:

Statement of funds from operation:

703.

704.

705.
706.
707.
708.
709.
710.

Fund from operation

711.
712. Step-3
Funds Flow Statement:
713.
714.

715.
716.
717.
718.
719.
720.
721.
722.
723.
724.

725.
726.

727.
728.

Table 1: SHARE CAPITAL OF Air India Ltd.,

729.
Particulars
733.
Equity
Shares
737.
738.
739.
Graph:740.

730.
201314
734.
1450

731.
201415
735.
1450

732.
2
015-16
736.
9
450

EQUITY SHARE
10000
9000
8000
7000
6000

EQUITY SHARE

5000
4000
3000
2000
1000
0
2013-14

741.
742.
Interpretation:

2014-15

2015-16

Analysis

&

743.

In 2014 the company having 1450 million worth of share

capital and this is continued till 2016 and there is no changes

were made in 2015 but in 2016 the company issued 9450
million worth of equity shares to raise the fund and it is a
sources of funds so it should be appear as source in fund flow
statement
744.
745.
746.
747.
748.
749.
750.

Source: Annual Report of the Company

Table 2: SECURED LOANS OF Air India Ltd.,

Ye
ars
753.
20
14
756.
20
15
759.
20
16
762.
763.
764.
Graph:

751.

Secured
Loans

754.

28917.5

757.

23659.5

760.

65907.1

752.

Percent
age

755.
100
758.
81.8172
387
761.
278.565
0584

765.

Secured loans
70000
60000
50000
Secured loans

40000
30000
20000
10000
0
2014

766.
767.

2015

2016

Analysis & Interpretation: It is inferred from the chart

that the company had a maximum of secuerd loan in the year

2016 Rs. 65907.1 million i.e., 278% when compared to the
years of 2014 and when analysed with the percentage 2015 has a
decrease of 18.18% .
768.
769.

Source: Annual Report of the Company.

770.
771.

Table 3: UNSECURED LOANS OF AIR INDIA LTD.,

772.

773.

Unsecur

774.

Percent

ears
ed Loans
775.
2
776.
155216.
014
5
778.
2
779.
168764.
015
9
781.
2
782.
184761.
016
1
784.
785.
Graph:

age
777.
100
780.
108.728
7112
783.
109.478
3927

Unsecured Loans
185000
180000
175000
170000
165000
160000
155000
150000
145000
140000

Secured Loans

2008

786.
787.

2009

2010

Interpretation & Analysis: Company having unsecured

loans in their business. In 2014 the company has 155216.5

million of unsecured loans, in 2015 it increases to 168764.9
million which increases the liability of the firm and it leads to
increase in liability is sources of fund which increases its debt
balance, 2016 the company loans increases to 184761.1 million
which shows the company having lots of borrowing which
increases the liability leads to sources of funds
788.
789.

Source: Annual Report of the Company

790.

791.

Table 4: INCOME OF AIR INDIA LTD.,

PARICU
LARS

795.
Scheduled
Services

799.

Others

803.
Handling,
Servicing and
Incidental

807.

Others

811.
Total
Revenue
815.
ge
819.
820.

Percenta
Graph:

792.
2013
14
796.
107,6
12
.6
0
800.
15,36
5.
40
804.
13,40
5.
50
808.
16,19
1.
20
812.
152,5
74
.7
0
816.
100

793.
2014
15
797.
100,5
15
.4
0
801.
19,28
1.
60
805.
12,44
8.
20
809.
2,548
.6
0
813.
134,7
93
.8
0
817.
88.34
61
02

794.
2015
16
798.
100,1
46
.4
0
802.
17,22
7.
80
806.
13,66
2.
00
810.
2,936
.5
0
814.
133,9
72
.7
0
818.
99.39
08
47

180,000.00
160,000.00
140,000.00
120,000.00
100,000.00
80,000.00
60,000.00
40,000.00
20,000.00
0.00

821.
822.
823.
824.

2007-08
2008-09
2009-10

Analysis & Interpretation: The Company is getting huge

revenue in 2014, 2015 and 2016 in scheduled services provided

to the customers but comparing to 2014 in 2015 it decreases to
88.34% & 2016 99.39% but comparing to 2015 its increasing.
825.
826.

Source: Annual Report of the Company

827.
828.
829.

Table 5: EXPENDITURE OF AIR INDIA LTD.,

830.
Expenses:
834.
Payments to and
Provisions for employees
including Crew Allowances
838.

Insurance

842.
846.

Aircraft Fuel and Oil

Navigation, Landing,

831.
2014
835.
32,245
.00
839.
851.3
843.
62,525
.10
847.

832.
2015
836.
33,388
.50
840.
861.8
844.
70,606
.40
848.

833.
2016
837.
33,567
.20
841.
914.70
845.
50,150
.20
849.

Housing and Parking

850.
Aircraft Material
Consumed
854.
Outside Repairs
Aircraft
858.

Hire of Aircraft

862.

Handling Charges

866.

Passenger Amenities

870.
Booking Agency
Commission
874.
Communication
Charges:
878.

Travelling Expenses:

882.

Depreciation

886.

Other Expenses

890.
Total Operating
Expenses
894.
Percentage

9,698.
40
851.
9,583.
70
855.
7,196.
00
859.
13,777
.00
863.
5,460.
90
867.
5,929.
30
871.
6,150.
00
875.
4001
879.
3,375.
40
883.
7616.6
887.
10,132
.90
891.
178,54
2.6
0
895.
100

9,290.
90
852.
5,560.
50
856.
5,533.
60
860.
15,225
.00
864.
5,290.
60
868.
4,865.
60
872.
4,360.
50
876.
4124.3
880.
3,604.
70
884.
12258.
9
888.
13,993
.20
892.
188,96
4.5
0
896.
105.51

10,604
.40
853.
4,262.
70
857.
8,031.
50
861.
11,774
.90
865.
6,045.
50
869.
4,838.
10
873.
4,083.
70
877.
4898.3
881.
3,136.
40
885.
13,897
.90
889.
9,583.
20
893.
165,78
8.7
0
897.
86.020

527

881

898.
899.
900.
901.
902.
903.
904.

905.
906.

Graph:

Expenses:

Payments to and
Provisions for employees
including Crew Allowances

Insurance

Aircraft Fuel and Oil

Navigation, Landing,
Housing and Parking

Aircraft Material
Consumed

Outside Repairs Aircraft

Hire of Aircraft

Handling Charges

Passenger Amenities

Booking Agency
Commission

Communication Charges:

Travelling Expenses:

Depreciation

Other Expenses

Total Operating Expenses

Analysis & Interpretation: The Companys expenses are

178,542.60 million, 188,964.50 million and 165,788.70 million

in the year of 2014, 2015 and 2016 respectively. In all the 3
years companys major expenses from Aircraft fuel and oil and
the payment of salary and other allowances which makes the

company having deficit in their a/c. These expenses not

compensated with the revenue generation where the scheduled
service is a major share of revenue.
907.
908.

Source: Annual Report of the Company

909.
910.
911.
912.

Table 6: CASH AT BANK OF AIR INDIA LTD.,

913.

Cash and Bank Balances

915.
20
914.
Particular
1
916.
2
s
4
015
919.
918.
Cash and
89.
920.
2
Cheque on Hand
7
09
923.
48
9
922.
Remittance
.
924.
1
s in Transit
4
9.3
927.
57
6
3
926.
Balance in
.
928.
2
Current A/c
9
419.8
931.
45
930.
Deposits in
0
932.
8
Banks
2
748.3
934.
Total
935. 936.
1
10
1396.

917.
2
016
921.

6
5.4

925.

0
.8

929.
1
531.1
933.
3
687.4
937.
5
284.7

938.
s
942.
943.

Percentage

8
4
5
939.
10
0

4
940.
1
05.08
43707

941.
4
8.729
36837

Graph:
9000
8000
7000
6000
Cash and Cheque on
Hand

5000
4000

Remittances in Transit

3000

Balance in Current A/c

2000

Deposits in Banks

1000
0
2008

944.
945.
946.

2009

2010

Analysis & Interpretation:

In all the years cash and Cheque and remittances are low

but current balances are in decreasing order from the subsequent

year. In 2014 and 2016 the company maintaining approximately
same level of deposits in its bank but in 2015 the bank balance
increased by the more deposits received which enables the
firms liquidity positions.
947.

Source: Annual Report of the Company

948.

Table 7: LOANS AND ADVANCE OF AIR INDIA

LTD.,
949.

Y
ear

950.

Loans &
Advances

951.

Perce
ntage

952.

2
014

955.

15602.1

956.

11175.9

959.

14466.5

954.
957.

100
71.63
0742
960.
92.72
14926

2
015

958.

2
016

961.
962.

953.

Graph:

Loans & Advances

16000
14000
12000
Loans & Advances

10000
8000
6000
4000
2000
0
2008

963.
964.
965.
966.

2009

2010

Interpretation & Analysis:

In 2014 the loans and advances was Rs. 15602.1 million

and in 2015 its decreases to 71% comparing to 2014, and it

increases to Rs. 14466.5 million in 2016 but decreases
comparing to 2014.
967.
968.

Source: Annual Report of the Company

969.
970.
971.
972.

Table 8:NET CURRENT INCOME OF AIR INDIA

LTD.,

973.
974.
Net Current Assets
Years
976.
2014
977.
20054.3
979.
2015
980.
54161.9
982.
2016
983.
9701.2
985.
986.
987.
988.
Graph:

975.

Perc
entage

978.
100
981.
270.
076243
984.
48.3
7466279

Net Current Assets

60000
50000
40000

Net Current Assets

30000
20000
10000
0
2008

989.
990.

2009

2010

Analysis & Interpretation:It is inferred from the chart

that the company had taken the higest income in the year 2015
Rs.54161.90 million as compared to the other previous year and
has the lowest income amount taken in the year 2016 Rs.9701.2
million The percentage of the year 2015 has been 270% in 2016
it decreases to 48%.
991.
992.

Source: Annual Report of the Company

993.

Table 9: Investments of AIR INDIA LTD.,

994.
995.

LONG TERM INVESTMENTS

997. 998.
2
999.
2
996.
PARTICU
20
014015LARS
15
16
1001.
1000. Shares in
70
1002. 7
1003. 7
Subsidiary Com
07.5
07.5
1005.
1004. Trade
16
1006. 5
1007. 5
Investments
04.5
04.2
1008. Other
1009.
Investment (Non24
1010. 1
Trade)
2.2
1011. 0
1013.
1012. QUOTED
7.
1014. 7
1015. 7
(Trade)
.6
.6
1017.
1016. Total
90
1018. 1
1019. 1
Investments
231.8
219.3
1021. 1022. 1
1023. 1
10
36.68
35.29
1020. Percentage
44208
73813
1024.
1025.
Graph:

1026.

1400
1200
1000

Shares in Subsidiary
Com

800

Trade Investments

600

Other Investment
(Non-Trade)

400

QUOTED (Trade)

200

Total Investments

0
2007-08

1027.
1028.
1029.

2008-09

2009-10

Interpretation & Analysis:

Company also made some investments. In 2014 the

companys investment was 901.2 million, and in 2015 it

increases to 1231.8 million it means that the company uses its
funds in purchasing the investments. In 2016 the company
having 1219.30 million of investment and it decreases by
comparing to previous years and it means sale of investments
during the year and it appears in the sources of funds and
appears in fund flow statements sources side.
1030.
1031.
1032.

Source: Annual Report of the Company

1033.
1034.
1035.
1036.
1037.
1038.
1039.
1040.
1041.
1042.
1043.
1044.
1045.
1046.
1047.
1048.
1049.
1050.
1051.

Calculation Of Working capital for the Year 2016:

1052.

Table No: 10
1053.

1063.
1068.
1073.
1078.
1083.
1088.

Changes in Working Capital (Rs in Millions)

1057.
Chan
ges in WC
1061.
Incre
1062.
a
Decre
1055.
1056.
s
as
1054.
Particulars
2015
2016
e
e
1064.
1065.
1066.
1067.
CURRENT ASSETS
1069.
1070.
9642.
8677.
1072.
Inventory
1
8
1071.
964.3
1075.
1076.
1074.
25791
1060.
1077.
Sundry Debtors
24731
.1
1
1079.
1080.
1082.
11396.
5284.
6111.
Cash and Bank Balances
4
7
1081.
7
1084.
1085.
1086.
1087.
Other Current Assets
561.6
768.1
206.5
Total Current Assets
1089.
1090.
1091.
1092.
46,33
40521

1093.
CURRENT
LIABILITIES
1098.
Sundry Creditors
1103.
Amount due to wholly
subsidiary com
1108.
Interest accrued but not
due
1113.

Advances from customer

1118.

Other Liabilities

1123.

Other Provisions

1128.

Total Current Liabilities

1.
10
1094.
1099.
24750
.7
1104.
36
1109.
71.2
1114.
7795.
8
1119.
9629.
2
1124.
10929
.9
1129.
53212
.8
1134.

1133.

Total Working Capital

6,
88
1.
70

.7
1095.
1100.
38189
.4
1105.
27.2
1110.
218
1115.
8652.
6
1120.
8379.
5
1125.
10040
.9
1130.
65507
.6
1135.
24
,9
85
.9
0

1096.

1101.
1106.
8.8
1111.
1116.
1121.
1249.
7

1148.
1149.
1150.
1151.
1152.
1153.
1154.
1155.
1156.
1157.

1102.
13438
.7
1107.
1112.
146.8
1117.
857
1122.

1126.
889

1127.

1131.

1132.

1136.
3414.
1

1137.
21518
.5
1142.
3414.
1
1147.
18104
.4

1139.

1140.

1141.

1144.

1145.

1146.

1138.
1143.
Decrease in Working
Capital

1097.

1158.
1159.

Calculation of Funds from operation for the Year 2016:

Table No: 11
1161.

1160.

Particulars

201
5-16
1164.
548
9
0

1162.

Net Profit Brought to Balance

Sheet
1165.
Add: Non Fund items charged

1163.
1166.

.
9
1167.

to the Debit Side of P&L A/c

1169.
168
8
1168.

Provision for Bad & Doubtful &

Advances

.
1
1172.
282.

1171.

Provisions for Obsolescence

Loss on Sale of Fixed Assets

1173.

1
1175.
408.

1174.

1170.

1176.

1
1178.
139
1

1177.
1180.
1183.

Depreciation

1179.

7
1181.

1182.

1184.

1185.

Transfer to Capital Reserves

162

9
5
.
3
1188.
711
8
6
1187.
1186.
1189.

Less: Non Fund items charged

1190.

2
1191.

1193.

1194.

1196.

1197.

to the Credit Side of P&L a/c

1192.
1195.

Profit on Sale of Fixed Assets

Dividend from Long Term

Investments

1198.
1201.

Provisions
Transfer from Capital Reserves

44.6
1199.
795.

1200.

7
1202.

1203.

19.5
1205.
633.

1204.

Transfer from General Reserves

1206.

5
1208.
777
4
4

1207.

P&L a/c Opening Balance in

Balance sheet
1210.

.
2
1211.

1209.
1212.
792

3
7
.
5
1215.
8
0
5
1
1214.
1213.

1216.
1217.
1218.
1219.
1220.
1221.

Funds Lost From Operations

Funds Flow Statement for the year 2016:

Table No:12

1222.
1224.

1223.
201516
1225.

SOURCES

1226.

Issue of Shares

1228.

Loans Borrowed:

1230.

Secured Loans

1232.
1234.

Unsecured Loans
Decrease in Working Capital

1227.
8000
1229.
1231.
42247
.6
1233.
15996
.2
1235.

1236.

Sale of Investments

1238.

Future Lease Obligations

1240.

Total
1242.

18104
.4
1237.
12.5
1239.
16672
.1
1241.
10103
2.8
1243.

Applications/Uses
1245.

1244.

Loans Repaid:
1247.

1246.

Secured Loans

1248.

Purchase of Fixed Assets

1250.

Purchase of Investments

1252.

Funds Lost From Operations

1254. Payment made towards other

Liabilities

1249.
60067
.1
1251.
1253.
8051.
3
1255.
32914
.4
1257.
10103
2.8

1256. Total
1258.
1259.
1260. Analysis & Interpretation:In 2016 the companys
working capital has decreased to 18104.4 million comparing to
2015 and it mainly because of current assets are less comparing
to current liabilities which is appeared in the sources side in

fund flow statement. The company also purchased fixed assets

during this year. In this year company issued 8000 excess shares
to raise the fund and also they sold some part of investments
too.
1261.
1262. Calculation Of Working capital for the Year 2015:
1263.

Table No:13

1264.
Particulars
1273.
CURRENT
ASSETS

1265.
201
4
1274.

1266.
201
5
1275.

1267.
Ch
anges in
WC
1271.
1272.
Inc
Dec
r
r
e
e
a
a
s
s
e
e
1276.
1277.

1280.
964
2
.
1

1281.

1282.
374

1286.

1287.
140
3
.
1

Sundry Debtors

1279.
10,0
1
6
.
1
0
1284.
26,1
3
4
.
1
0

1288.
Cash and Bank
Balances

1289.
108
4
5

1285.
247
3
1
1290.
113
9
6
.
4

1293.
Other Current
Assets
1298.
Total Current
Assets

1294.
321.
2
1299.
47,3

1295.
561.
6
1300.
46,3

1278.

1283.

Inventory

1291.
551
.
4
1296.
240
.
4
1301.

1292.

1297.
1302.

1303.
CURRENT
LIABILITIES

1308.
Sundry Creditors
1313.
Amount due to
wholly subsidiary com
1318.
Interest accrued
but not due

1323.
Advances from
customer

1328.

1333.

Other Liabilities

Other Provisions

1338.
Total Current
Liabilities

1343.
Total Working
Capital
1348.

1
6
.
4
0
1304.

3
1
.
1
0
1305.

1309.
274
8
5
.
4
1314.
184
1319.
38.1
1324.
770
5
.
6
1329.
744
8
.
7
1334.
923
4
.
5
1339.
520
9
6
.
3
1344.
4
,
7
7
9
.
9
0
1349.

1310.
247
5
0
.
7
1315.
36
1320.
71.2
1325.
779
5
.
8
1330.
962
9
.
2
1335.
893
2
.
5
1340.
512
1
5
.
4
1345.
4
,
8
8
4
.
3
0
1350.

1306.

1307.

1311.
273
4
.
7
1316.
148

1312.

1321.

1326.

1331.

1317.
1322.
33.1

1327.
90.6
1332.
218
0
.
5

1336.
302

1337.

1341.

1342.

1346.
397
6
.
5
1351.

1347.
408
1
.
3
1352.
397

1353.
Decrease in
Working Capital

1358.
1359.
1360.
1361.
1362.
1363.
1364.
1365.
1366.
1367.
1368.
1369.
1370.
1371.
1372.
1373.

1354.

1355.

1356.

Calculation of Funds from operation for the Year 2015:

Table No:14
1375.

1374.

6
.
5
1357.
104.
8

Particulars

2014
-15

1377.
1376.
1379.

Net Profit Brought to Balance Sheet

Add: Non Fund items charged to the

1380.

1378.
1381.

Debit Side of P&L A/c

1383.
1382.

Provision for Bad & Doubtful &

Advances

1385.
1388.
1391.

Provisions for Obsolescence

Loss on Sale of Fixed Assets
Depreciation

332.

1384.

9
1386.
805.

1387.

2
1389.

1390.

1392.

1393.

183
8

0
.
5
1395.
133
8
.
1394.

Transfer to Capital Reserves

1396.

9
1399.
2085
1398.

1397.

7.
5
1402.
2085

1400.
1403.

Less: Non Fund items charged to the

1401.

7.

1404.

5
1405.

Credit Side of P&L a/c

1407.
104
6
.
1406.
1409.

1412.
1415.

Profit on Sale of Fixed Assets

Dividend from Long Term Investments

Provisions

2
1410.

1408.
1411.

72.1
1413.
999.

1414.

4
1416.

1417.

Transfer from Capital Reserves

1419.
777
4
4
.

1418.
1421.

Transfer from General Reserves

P&L a/c Opening Balance in Balance

2
1422.

1420.
1423.

222
6
1
.
sheet

6
1426.
1021
2
1425.

1424.

3.
5
1429.
8
1
2

1428.
1427.

1430.
1431.
1432.
1433.
1434.
1435.
1436.
1437.

Funds Lost/used From Operations

Funds Flow Statement for the year 2015:

Table No: 15

1438.
1440.

1439.
201415
1441.

SOURCES
1443.

1442.

Issue of Shares
1445.

1444.

Loans Borrowed:
1447.

1446.

Secured Loans

1448.

Unsecured Loans

1450.

Decrease in Working Capital

1452.

Sale of Investments

1454.

Future Lease Obligations

1456.

Total
1458.

1449.
92558
.1
1451.
104.8
1453.
1455.
53997
.4
1457.
14666
0.3
1459.

Applications/Uses
1461.

1460.

Loans Repaid:

1462.

Secured Loans

1464.

Purchase of Fixed Assets

1466. Purchase of Investments

1468. Funds Lost/used From
Operations
1470. Payment made towards other
Liabilities

1463.
5258
1465.
55312
.6
1467.
330.6
1469.
81266
1471.
4493.
1
1473.
14666
0.3

1472. Total
1474.
1475.
1476. Analysis & Interpretation: Comparing with 2014, in
2015 the company working capital has decreased to 104.8

million and the companys fund lost/used from operations is

81266 million which is appeared in application side in balance
sheet. In this year the company borrowed the secured loans and
repaid some portion of unsecured loans and also they purchased
some investment as well as some fixed assets.
1477.

1478. Calculation Of Working capital for the Year

2014:
1479.
1480.
1481.

Table No: 16
1482.

Changes in Working Capital (Rs in Millions)

1486.
Ch
anges in
WC
1490.
1491.
Inc
Dec
r
r
e
e
a
a
1484.
1485.
s
s
1483.
Particulars
2013
2014
e
e
1492.
CURRENT
1493.
1494.
1495.
1496.
ASSETS
1499.
1500.
1498.
1001
266
7351
6
4
.
.
.
1501.
1497.
Inventory
3
1
8
1505.
1504.
117
2613
2
1503.
4
8
1440
.
.
1506.
1502.
Sundry Debtors
6
1
1
1510.
1508.
779
3053
1509.
1
1507.
Cash and Bank
.
1084
.
1511.
Balances
6
5
4
1513.
1514.
1512.
Other Current
248.
318.
1515.
1516.
Assets
6
9
70.3

1517.
Total Current
Assets
1522.
CURRENT
LIABILITIES

1518.
25,0
5
9
.
5
0
1523.

1537.
Interest accrued
but not due

1528.
8241
.
3
1533.
400
1538.
146.
3

1542.
Advances from
customer
1547.
Advances from
Staff-Nerul Complex

1543.
4734
.
2
1548.
49.1

1552.

Other Liabilities

1553.
1813
.
2

Other Provisions

1558.
3676
.
8

1527.
Sundry Creditors
1532.
Amount due to
wholly subsidiary com

1557.

1562.
Total Current
Liabilities

1563.
1906
0
.
9

1567.
Total Working
Capital

1568.
5,99
8
.
6
0

1519.
47,3
1
4
.
1
0
1524.
1529.
2748
5
.
5
1534.
184
1539.
38.1
1544.
7705
.
6
1549.

1520.
222
5
4
.
6
1525.

1530.
1535.
216
1540.
108.
2

1545.
1550.
49.1

1526.
1531.
192
4
4
.
1
1536.
1541.
1546.
297
1
.
4
1551.

1565.
373.
3

1556.
563
5
.
5
1561.
555
7
.
5
1566.
334
0
8
.
5

1570.
226
2
7
.
9

1571.
334
0
8
.
5

1554.

1555.

1559.

1560.

1564.
3541
3
.
2
1569.
11,9
0
0
.
9
0

1521.

1573.

1574.

1575.

1578.

1579.

1580.

1572.

1577.
Decrease in
Working Capital
1582.
1583.
1584.
1585.
1586.
1587.
1588.
1589.
1590.
1591.
1592.

1576.
226
2
7
.
9
1581.
107
8
0
.
6

1593. Calculation of Funds from operation for the Year

2014:
1594.
1595.
1596.

Table No: 17

Statement Showing Funds from Operations (Rs in Millions)

1598.
201
1597.
Particulars
3-14
1601.
2226
1
1600.
.
1599.
Net Profit Brought to Balance Sheet
6
1602.
Add: Non Fund items charged to the
1603.
1604.
Debit Side of P&L A/c
1605.
Provision for Bad & Doughtfull debt &
1606.
1607.
Advances
238
1609.
308
1610.
1608.
Provisions for Obsolescence
9
1612.
760
1
.
1613.
1611.
Depreciation
2

1614.

Transfer to Capital Reserves

1615.
789
4
2
.
9

1618.
1617.

1621.
1620.
1623.
Less: Non Fund items charged to the
Credit Side of P&L a/c

1626.

Profit on Sale of Fixed Assets

1629.

Dividend from Long Term Investments

1632.
P&L a/c Opening Balance in Balance
sheet

1624.
1627.
469
8
.
2
1630.
101
0
.
8
1633.
267
3
.
3
1636.

1616.
1619.
8987
1
.
1
1622.
1121
3
2
.
7
1625.

1628.

1631.
1634.
8382
.
3
1637.

1635.

1639.
1638.
1641.
1642.
1643.
1644.
1645.
1646.
1647.
1648.

Funds Lost From Operations

1640.
1037
5
0
.
4

1649.
1650.
1651.
1652.
1653.
1654.
1655.
1656.
1657.

1658. Funds Flow Statement for the year 2014:

1659.
1660.
1661.

Table No: 18
1662.

1667.
1669.
1671.
1673.
1675.
1677.

1681.
1683.
1685.
1687.
1689.

1690.

FUND FLOW STATEMENT 2013-14

1664.
20131663.
14
1666.
1665.
SOURCES
1668.
Issue of Shares
1670.
Loans Borrowed:
10780.6
1672.
108424.
Funds from Operations
7
1674.
103750.
Decrease in Working Capital
4
1676.
Sale of Investments
5.8
1678.
222961.
Total
5
1680.
1679.
Applications/Uses
1682.
Redemption of shares
88.4
1684.
179978.
Purchase of Fixed Assets
4
1686.
Payment made towards other Liabilities
42894.7
1688.
222961.
Total
5

1691.
1692.

Analysis & Interpretation:

In 2014, the companys

working capital has been decreases to Rs. 10780.6 millions but

they have Rs. 103750.4 million as funds from operations.
During this year they decreased the number of shares to 1450
and also they taken loans both secured and unsecured for
expansion and sold some portions of investments too.
1693.
1694.
1695.
1696.
1697.
1698.
1699.
1700.
Conclusion:
1701.
1702.
Summary of
from Operation for various Years:
1703.
1704.
1705.
Table No: 19
1707. Funds
1706. Y
From
ears
Operations
1708. 2
0151709. 16
8051.3
1710. 2
0141711. 15
81266
1712. 2
0131713. 10842
14
4.7
1714.
1715.

Funds

1716.
1717.

Funds From Operations

150000
100000
Funds From
Operations

50000
0
2009-10

2008-09

2007-08

-50000
-100000

1718.
1719.
1720.
1721.

According to

the above calculated funds flow statement, the funds from

operation of the company has declined over the. This is due to
the fluctuation of the companys profits over the years. This
shows that the company is not able to achieve its targets in
concern to the projects undertaken.
1722.
1723.

This suggests

that the company need to assess its resources and try to generate
more profits out of the projects undertaken by them.
1724.
1725.
1726.

1727.
1728. FINDINGS:
1729.
Companys current asset was 47,316.40 million, 46,331.10
million and 40521.7 million in 2014, 2015, and 2016
respectively over the current liabilities of 52096.3 million,
51215.4 million, and 65507.6 million which is over the current
ratio which decreases the companys flow of funds during the
past 3 year
In 2014 and 2015 its share capital was 1450 million but later on
in 2016 they increased it to 9450 million which helps the
company to survive even in loss.
In 2014 because of amalgamation the company having capital
reserve in its account and later on in 2015 the general reserve
and surplus was 633.5 million, 2016 its 624.8 million which is
mainly because of the company undergoing loss of 77,744.2
million in 2015.
The secured loans in 2014 was 17966.3 million, in 2015 it was
increases to 23659.5 million and again its increases to 65907.1
million in 2016. It increased because of payment of insured
value of aircraft and some hypothecations.
Unsecured loans were155216.5 million, 168764.9 million,
184761.1 million in 2014, 2015 and 2016 respectively. It
includes 7000 million worth of debentures during the year of
2016.

 Future lease obligation was not held in 2014 but in 2015 it is

116887.5 million and it increases to 133599.6 million. It
represents that Govt. of India given guarantee up to the extent.
The fixed assets was 218670.7 million, 275027.2 million and
321076.1 million in 2014, 2015 and 2016 respectively which is
in increasing order. They purchased huge assets in subsequent
years. Fixed assets also include some work-in-progress/process.
Investment was 901.2 million, 1231.8million and 1219.3 million
in 2014, 2015 and 2016 respectively. These investment includes
unquoted long term investments of subsidiary company, trade
investments, other investments i.e., non-trade and quoted i.e.,
trade investments.
The company is getting huge revenue of 152574.7 million,
134793.8 million, and 134022.7 million in 2014, 2015 and 2016
respectively. In this main part of income came from passengers
and cargo. It helps the companys total revenue to increase.
The company also bearing huge expenses of 178542.6 million,
188964.5 million, 165806.7 million in 2014, 2015 and 2016
respectively. In that payment made on fuel and oil and payments
to the employees including crew allowances paying the main
role in increasing the expenses.
1730.
1731.
1732.
1733.
OBSERVATIONS
Only Government organization that has been professionally
managed.
It has received numerous awards.

 Air India Limited is administered and controlled by the

Government of India.
It has got a neat segmentation of Departments.
Air India Limited having the major share in Aviation
Industry
Schedules are maintained effectively for their passengers.
Air India Limited having its own subsidiaries which helps
them to better services to their passengers.
1734.
1735.
1736.
1737.
1738.
1739.
1740.
1741.
1742.
1743.

CONCLUSIONS:
From the findings it is inferred that the company should
concentrate on the capital so there could be expansion of
the business activities.
The funds from the operations have negative balance i.e.
in the working capital the company needs to take steps to
avoid the deficit of the business.
The company is in the profitable condition is low as the
expenses is consistently increasing over the income
during subsequent years.
The company must think over the strategy over the fuel
and oil which makes the huge payment leads to reduce the
income of the business.
1744.

1745.

It could be concluded that

the funds from operation calculation is important as it shows the

working capital of the company and the profit and loss apportion
account and finally the funds from operation which in need sites
the need for funds in the future and the sources that could be
polled out from.
1746.
1747.
1748.
1749.
1750.
1751.

RECOMMENDATION

S
1752.
The company should maintain proper liquidity position by
increasing the liquid assets such as cash and bank balance,
sundry debtors, and other current assets and decrease the current
liabilities like sundry creditors, advances from customers and
etc., which enables the companys working capital in favorable
positions
1753.
The company should try to reduce the cost of fuel which is more
expensive or try to avoid the frequent flying which is not
profitable to them
1754.
1755.
Company should increase its scheduled services which fetch the
companys revenue and helps them to reduce the other cost
occurred during the travelling.

1756.
The payment and allowances are more which leads to reduce the
profitability positions of the company and try to reduce
unnecessary allowances provided to employees and also to the
passengers.
1757.
1758.
Company should increase its share capital instead of raising
funds from secured loans and unsecured loans help them to
reduce the burden of payment of interest.
1759.
Company should have the control over its expenses over the
income which helps the company to earn the profit.
1760.
1761.
Using open sky policy the company should extend its network
and fetch more profit through services provided to customers
like premium classes.
1762.
The flow of funds is inadequate so the company should invest
and utilize the money in best way where the company can get
more return.
1763.
1764.
It is advisable to the company that to increase its maintenance
cost charge for premium and other classes helps to earn the
income from it
1765.
Company should maintain some reserve as general reserve
which helps them to compensate in future uncertainties.

1766.

D. ANNEXTURE

1767.

Balance Sheet As at 31st March 2014, 2015, 2016:

1768.

Particulars

1772.

I.

SOURCES OF FUNDS:

1776.

Shareholders Funds:

1780.

a.

Capital

1784.

b.

Reserves and Surplus

1788.
1792.

Loan Funds:

1796.

a.

Secured Loans

1800.

b.

Unsecured Loans

1804.

1769.
20131
4
1773.

1770.
20141
5
1774.

1771.
20151
6
1775.

1777.

1778.

1779.

1781.
1,450.
0
0
1785.
78,94
2.
9
0
1789.

1782.
14,50.
0
0

1783.
9,450.
0
0

1786.
633.5
1790.

1787.
624.8
1791.

1793.

1794.

1795.

1797.
28,91
7.
5
0
1801.
155,2
1
6.
5
0

1798.
23,65
9.
5
0
1802.
168,7
6
4.
9
0

1809.
264,5
2
6.
9
0
1813.

1810.
311,39
5.
4
0
1814.

1799.
65,90
7.
1
0
1803.
184,7
6
1.
1
0
1807.
133,5
5
9.
6
0
1811.
394,3
0
2.
6
0
1815.

1817.

1818.

1819.

1821.
186,5
4
5.
6
0

1822.
243,2
9
4.
0
0

1823.
328,4
1
0.
5
0

Future Lease Obligations

1805.

1808.

TOTAL

1812.

II.

1816.

Fixed Assets:

1820.

a.

APPLICATION OF FUNDS:

Gross Block

1806.
116,88
7.
5
0

1824.

Less: Depreciation

1828.

b.

Net Block

1832.

c.

Capital Work-in-Progress

1836.
1840.

Investments:

1844.

Deferred Tax Assets (Net):

1848.

Foreign Currency, Monetary Items

1852.

Translation Difference Account

1856.
1860.

Current Assets, Loans and Advances:

1864.

a.

Inventories

1868.

b.

Sundry Debtors

1872.

c.

Cash and Bank Balances

1876.

d.

Other Current Assets

1880.

e.

Loans and Advances

1826.
18,38
0.
5
0
1830.
224,9
1
3.
5
0
1834.
50,11
3.
7
0
1838.

1827.
31,99
0.
6
0
1831.
296,4
1
9.
9
0
1835.
24,65
6.
2
0
1839.
1843.
1,219.
3
0
1847.
28,42
5.
2
0

1853.

1842.
1,231.
8
0
1846.
28,42
4.
2
0
1850.
1,528.
0
0
1854.

1857.

1858.

1859.

1861.

1862.

1863.

1865.
10,01
6.
1
0
1869.
26,13
4.
1
0
1873.
10,84
5.
0
0
1877.
318.9
0
1881.
15,60
2.
1
0

1866.
9,642.
1
0
1870.
24,73
1.
0
0
1874.
11,39
6.
4
0
1878.
561.6
0
1882.
11,17
5.
9
0

1867.
8,677.
8
0
1871.
25,79
1.
1
0

1825.
7,601.
2
0
1829.
178,9
4
4.
4
0
1833.
39,72
6.
3
0
1837.

1841.
901.2
1845.
11,87
3.
4
0
1849.

1851.
99.50
1855.

1875.
5,284.
7
0
1879.
768.1
0
1883.
14,46
6.
5
0

1884.
1888.

Less: Current Liabilities and Provisions

1892.

a.

Current Liabilities

1896.

b.

Provisions

1900.

1885.

1886.

1887.

1889.

1890.

1891.

1893.
42,86
1.
8
0

1894.
42,28
2.
9
0
1898.
10,04
0.
9
0
1902.

1895.
55,46
6.
7
0
1899.
10,92
9.
9
0
1903.

1897.
9,234.
3
0
1901.

1907.

1904.

1908.

1912.

Net Current Assets

Profit and Loss Account

TOTAL

1905.
10,82
0.
0
0
1909.
22,26
1.
6
0
1913.
264,5
2
6.
9
0

1906.
5,183.
2
0

1910.
1914.
311,39
5.
4
0

1
1,
4
0
8.
4
0
1911.
54,89
0.
9
0
1915.
394,3
0
2.
6
0

1916.
1917.
1918.
E.BIBILIOGRAPHY
1) M.N.ARORA (2006), Management Accounting 1st edition pg
-2.1 to 2.20 Published by Mrs. Meena Pandey, Himalaya
Publishing House. Mumbai-400004
2) Website www.himpub.com
1919.
3) Dr .JAWAHAR LAL (2014) reprint,

Accounting

for

management 4th edition pg -174 to 192 Published by

Mrs.MeenaPandey,Himalaya Publishing House.Mumbai-400004
4) Website www.himpub.com

5) I.M.PANDEY(2015) reprint, Financial management 9th edition

pg -583 to 591 Published by Vikas Publishing Pvt. House Ltd
Noida-201301
6) Website www.vikaspublising.com
7) Annual reports of Air India Ltd.,
8) www.businesstoday.intoday.in
9) www.airindia.com
10)

Management Accounting

By, B.S Raman

11)

WEBSITE:

www.airindia.com
1920.
1921.