Organization structure defines how tasks are to be allocated, who reports to whom,
and the formal coordinating mechanisms and interaction patterns that will be followed. They
basically consist of three components: complexity, formalization and centralization.
Organizations are a number of clustered entities. The structure of an organization is usually
set up in one of a variety of styles, dependent on their objectives and ambience. The structure
of an organization will determine the modes in which it shall operate and will perform.
Organizational structure allows the expressed allocation of responsibilities for different
functions and processes to different entities.
The two large players of the aviation industry i.e Air India and Indian Airlines entered into a
merger in April, 2007 in a bid to consolidate and optimize the use of the assets of the two
public sector airlines.
Any M&A combines divergent cultures, strategic orientations and practices into a new
configuration and thus creates intra-firm variations. Friction between existing factions is
prone to occur. The magnitude of tensions at these corporations might be a function of the
dissimilarity of cultures and practices of their parent firms.
The formation of the new organizational structure with due consideration to the previous two
individual organizations is a very vital part to effective future functioning of the merged
entity. Every single aspect of the previous structures needs to be taken into consideration
while forming the new structure.
In the study below, the structure of Air India, India Airlines and the new merged structure i.e.
NACIL has been studied with reference to the various aspects such as formalization,
centralization, flexibility, etc.
Sr. No Table of Contents Pg. No
1. Background of Indian Aviation 5
2. Organizational Structure : An overview 8
3. Air India: Company Profile 10
4. Organization structure of Air India 14
5. Analysis of the Structure 28
Department-Wise Structure 30
7. Indian Airlines: Company Profile 32
8. Analysis of the Organizational Structure 34
National Aviation Company of India Limited (NACIL)
10. NACIL: Merged Organizational Structure 38
11. Analysis of the Structure 40
12. Observations & Limitations 41
13. Conclusion 42
Background of Indian Aviation
Phase I (up till 1986)
The legacy of Indian aviation dates back to 1912 when India’s first air mail service was
started by Tata Airlines. Tata Airlines though was started as an air mail service but soon
ventured in carrying scheduled passenger traffic. In 1946, Tata Airlines was renamed as Air
India. In early 1948, a joint sector company, Air India International Ltd., was established by
the Government of India and Air India (earlier Tata Airline) .At the time of independence the
number of companies operating with in and beyond frontiers of the country were 8 namely:
Tata Airlines, Indian National Airways, Air service of India, Deccan Airways, Ambica
Airways, Bharat Airways and Mistry Airways.
The government in 1950 had set an Air Traffic Enquiry Committee to look into the problems
faced by the airlines. The soaring prices of aviation fuel, mounting salary bills and
disproportionately large fleets took a heavy toll of the then airlines. The financial health of
companies declined despite liberal Government patronage, particularly from 1949, and an
upward trend in air cargo and passenger traffic. Though the Committee found no justification
for nationalization of airlines, it favored their voluntary merge. So Government in the wake
of deteriorating financial conditions of the Airlines decided to step in and nationalize the air
transport industry and accordingly, two autonomous corporations were created on August 1,
1953. In 1953, the government nationalized the airlines via. The Air Corporations Act, 1953,
which gave birth to Indian Airlines and Air India. Indian Airlines was formed with the
merger of eight domestic airlines to operate domestic services, while Air India International
was to operate the overseas services. The Act also gave monopoly power to Indian Airlines
to operate on domestic scheduled services to the exclusion of any other operator. Air India
became the only Indian carrier to operate on international routes except for some routes to
the neighboring countries which were given to Indian Airlines.
Phase II (1986-2003)
The second phase of Indian aviation began in the year 1986 with granting of permission to
private sector players to operate as air taxi operators. The private players allowed to operate
as air taxi operators included Air Sahara, Jet Airways, Damania Airways, East West Airlines,
Modiluft and NEPC Airways. In 1994, government of India repealed the Air Corporation Act
there by. Following this measure in 1995, govt. granted scheduled carrier status to six private
air taxi operators. However, not many operators were able to continue their business and by
1997 only four operators started operations followed the deregulation continued to operate:
Jet Airways; Air Sahara; Jagsons and Spicejet (previously operated as Modiluft ) .Eventually,
by 1998, at least six private airlines, East- West, Modi-Luft, NEPC, Damania, Gujarat
Airways and Span Air were closed and according to an estimate, the capital losses involved
in these closures were to the tune of Rs 10 billion.
Phase III (2003-2006)
Only two private carriers survived to see the dawn of the new century. The duopoly of Jet
and Sahara as private carrier was challenged in 2003 by Air Deccan whose operations in
scheduled services began in August. The entry of Deccan changed the entire canvas on which
the aviation sector was defined. Air Deccan gave India its first Low Cost Carrier (LCC). This
marked as a turning point in the history of Indian Aviation Sector as it marked a shift from
the stereo type economy fares.
Phase IV (Year 2006 onwards)
Yet another milestone in the history of the Indian Aviation sector came in the year 2007
which is the year of Marriages in the Indian Skies! Though the marriage of Jet-Sahara & IA-
AI was announced in 2006 but the ultimate consummation materialized only in 2007. The
current year has witnessed a series of M&A of airlines namely: Indian-Air India; the Jet-
Sahara Deal; the Kingfisher-Deccan Deal. These players post consolidations have claim over
80% of the market share. The industry sources favored the consolidation attempts, as the
proposed mergers would help the carriers get rid of the widespread duplication of capacity,
rationalization in the route networks & fleets and also facilitate sharing of infrastructure,
which would help the merged entities, save a lot on its operational costs & enable the sector
to tide over huge industry losses. The mergers are expected to help the firms break even &
there by ensure carriers’ sustainability in long term.
The Year-2007 had been the year of M&A in the Indian Skies. First, it was Indian
Airlines & Air India then Jet & Air Sahara and last but the least to tie the knot was
Kingfisher & Air Deccan.
The merger of Air India & Indian Airlines has brought about the formation of a new
company called the National Aviation Company of India (NACIL). NACIL ranks
among the top airlines in the world. The combined fleet size of over 110 aircraft is
comparable to the best airlines in the Asian region.
Organization Structure: An Overview
Organizational structure specifies the firm’s controls, authority, decision making
processes, and formal reporting relationships. It influences how managers work and the
decisions resulting from that work. It simply refers to the way in which the jobs are formally
divided, grouped and coordinated in an organization. The key elements involved are work
specialization, departmentalization, chain of command, span of control, centralization &
decentralization and formalization.
One of the most important determinants of the structure of an organization is size.
Based on various studies conducted of Government agencies, universities, and major
department stores, it has been concluded that “size is the most important condition affecting
the structure of organizations”. It has been found that increasing size promotes structural
differentiation but at a decreasing rate. Increases in organization size are accompanied by
initially rapid and subsequently more gradual increases in the number of local branches into
which the agency is spatially dispersed, the number of official occupational positions
expressing division of labor, the number of vertical levels in the hierarchy, the number of
functional divisions at the headquarters, and the number of sections per division.
Organizational size is also related positively to specialization, formalization and
vertical span and negatively to centralization. Larger organizations are more specialized,
have more rules, more documentation, more extended hierarchies, and a greater
decentralization of decision making further down such hierarchies. The impact of size on
these dimensions expanded at a decreasing rate as size increased. That is, as size increased,
specialization, formalization, and vertical span also increased but at a declining rate, whereas
centralization decreased but at a declining rate as size increased. But size does not dictate all
of an organization’s structure but it is important in predicting some dimensions of structure.
Size and Formalization
The relationship between size and formalization has been studies and concluded to be very
high and positive. A logical connection between an increase in size and an increase in
formalization has been seen. Management seeks to control the behaviour of employees. Two
popular methods are direct surveillance and the use of formalized regulations. Although not
perfect substitutes for each other, as one increase, the need for the other should decrease.
Because surveillance costs should increase very rapidly as organizations’ expand in size, it
seems reasonable to propose that there would be economies if management substituted
formalization for direct surveillance as size increased. Rules and surveillance are both
aspects of control. The former is impersonal; the latter requires such activities as supervising
work closely and inspecting the quantity and quality of work. In small organizations, control
through surveillance maybe achieved relatively easily through informal face-to-face
relationships. But as the organization grows, there are more subordinates to supervise so that
it becomes increasingly efficient to rely more on rules and regulations for exerting control.
We can expect, therefore, to find an increase in formal rules and regulations within an
organization as that organization increases in size. Hence, we conclude that “the larger the
organization, the more formalized its behaviour” which also emphasizes that larger
organizations formalized those activities that have a propensity to recur often. The larger the
organization, the more that behaviors repeat themselves, and hence management is motivated
to handle them more efficiently through standardization.
Size and Centralization
It is not possible to control large organizations from the top: because more much more is
happening than an individual or set of individuals can comprehend, there is inevitable
delegation. As we concluded, formalization increases with size. These rules and regulations
allow top management to delegate decision making while at the same time ensure that the
decisions are made in accordance with the desires of top management.
Air India: Company Profile
Air India is India’s national flag carrier. Although air transport was born in India on
February 18, 1911, when Henri Piquet, flying a Humber bi-plane, carried mail from
Allahabad to Naini Junction, some 6 miles away, the scheduled services in India, in the real
sense began on October 15, 1932. It was on this day that J.R.D Tata, the father of Civil
Aviation in India and founder of Air-India, took off from Drigh Road Airport, Karachi, in a
tiny, light single-engine de Havilland Puss Moth on his maiden flight to Mumbai via
Air-India International inaugurated its international services on June 8, 1948, with a
weekly flight from Mumbai to London via Cairo and Geneva with a Lockheed Constellation
The deteriorating financial condition of the various airlines operating in India in 1950s
forced the government to step in and nationalize the air transport industry and accordingly
two autonomous corporations were created on August 1, 1953. Indian Airlines was formed
with the merger of eight domestic airlines to operate the domestic services, while Air-India
International was formed to operate the overseas services. The word ‘International’ was
dropped in 1962. From March 1, 1994, the airline has been functioning as Air-India Limited.
To create and maintain consumers and customers of international transportation by
providing competitive superior package of services and generate a sustainable surplus
by keeping the assets in a new and contemporary state and deploy the net surplus for
growth and for justifiable reward to the stakeholder.
To generate a net inflow of foreign exchange and seek its progressive enlargement
through a larger share of the international market.
To contribute through competitive success of Air-India Limited to the national
preparedness for the inevitable progressive globalization of the economy by
generating confidence in the Indian business genius.
To inspire people to make India win and take pride in India and Air-India Limited.
To enhance its competitive market standing and image as an international carrier.
To achieve the highest level of safety of operations.
To provide safe, efficient, adequate, economical and properly co-ordinate
international air-services, and to develop such services to the best advantage.
To provide high standards of services to passengers and customers on ground and in
To achieve, maintain and improve its rightful place in the international air transport
To make an increasing contribution to the national economy and maximize revenues
with efficient fleet utilization and route network.
To promote international tourism to India and to improve the nation’s foreign
To assist in the promotion of nation’s export trade.
To improve the national economy by encouraging local skills and technology to get
equipment and materials other than aircraft, indigenously manufactured with the
intention to curtail imports steadily.
To promote healthy relations with the various employee’s unions for ensuring
employee’s co-operation in the performance of the company’s activities.
To provide wider participation amongst its employees in management functions.
Board of Members
Minister of Civil Aviation
Chairman Secretary – Ministry of Civil Aviation
Chairman – Air India
Managing Director - Air India
Chairman – Airports Authority of India
Joint Secretary - Ministry of Civil Aviation
Joint Secretary and Financial Advisor - Ministry of Civil Aviation
Chairman – Indian Airlines
Managing Director - Indian Airlines
Chairman – ICICI Ltd.
ORGANISATION STRUCTURE OF AIR INDIA
- Safety is considered paramount in the aviation industry and all agencies connected with it
like airlines, aircraft and engine manufacturers, international aviation organisations and
regulatory authorities are united in their efforts to ensure safety of operations.
- Air India has a department of Air safety entrusted with the responsibility of overseeing the
safety of its operations. The activities of the Department are based on the recommendations
contained in ICAO Annexes, resolutions of IATA and the directions of the Director General
of Civil Aviation as contained in the Civil Aviation Requirements (CARs), Aeronautical
Information Circulars (AICs), Air Safety Circulars etc. Air India has been a member of Flight
Safety Foundation since 1974.
- The thrust of overseeing safety of flight operations, of both Air India and its wet lease
operations, is on ensuring adherence to Standard Operating Procedures (SOPs). SOPs are
equally applicable to aircraft, engine and equipment maintenance, passenger and cargo
handling, ramp operations, security, training and fitness of flight and cabin crew, in flight
- The Department of Air Safety monitors the activities of all the above Departments through
periodical audits of al field Departments, both at base (Mumbai) and outstations. The audits
are conducted twice a year at Indian stations and once a year at foreign stations.
- The Department of Air Safety has regular interaction with other airlines, IATA, etc. and
participates in a regular safety information exchange programme involving these agencies.
- Safety information is also disseminated to flight crew and other Departments through an in –
house Safety Magazine entitled “On your Guard”. This magazine is published in January and
July every year and contains safety related articles and information gathered from various
- Aircraft Ground Handling Services
Ground Services Department has the responsibility of providing speedy and efficient services
on the ramp to Air India flights as well as those of foreign carrier flights at the six
international airports in India
The Ground Services Department has in its fleet all the requisite equipments to handle
different types of aircraft of major airlines. Besides the regular equipment replacement
policy, more sophisticated ground handling equipment is been added to enable the
department to satisfactorily meet the handling requirement of all customer airlines.
- Handling Agreement
Ground Services Department is the agency responsible for finalization of handling
agreements pertaining to flights of foreign airlines at Indian stations and Air India flights
abroad where the handling functions have been entrusted to foreign airlines / local handling
Human Resource Department
- Manpower Planning
- Industrial Relations
- Time Office
- Canteen Services
- SC / ST Cell
(1) To plan the manpower requirement & also manage the budget of HR with necessary,
qualification, skill, aptitude, merit & also see the organizational requirements.
(2) To ensure that the company attracts & retains the best personnel in each and every
section of the company.
Sources of Recruitment
(1) Departmental candidates
(2) Employment Exchanges
(3) Open Market [OBC]
(4) Recognised Associations and Agencies
(5) Announcements on All India Radio
(6) Reputed Engineering / Management Institutes
(7) Central / State Government / Other Public Sector undertakings
(8) Any other source approved by the Competent Authority in exceptional circumstances.
(1) Recruitment on All India Basis
- Salary grade 4975 – 7550 and above
- Cabin Crew [MIF]
(2) Recruitment on Local / Regional Basis
(3) Employment Notice
- Staff – General / Other Categories
(4) Employment Exchange
- Employment Exchange Act 1959 [Compulsory Notification of Vacancies]
- Notifications to the Central / State Government
(5) Reservations for the Schedule Caste / Schedule Tribes / Other Backward Castes
- Schedule Caste: 15%
- Schedule Tribes: 7.5%
- OBC: 27%
(6) Reservation of Posts for Ex-Servicemen
(7) Reservation of posts for physically handicapped persons
(1) Written / Aptitude & Trade Test
- Assistant Flight Pursuer
- Traffic Assistance
- Non- executive
- Other technical posts
Selection panel: Representation of the concerned department, HRD department
representative, SC / ST / Welfare cell
- Most suitable candidates offered employment
- Others Approved: Waiting List [1yr]
- Appointment subject to medical examination conducted by the company.
The establishment section deals with record keeping of all employees of the organization. It
carries out many important functions such as maintenance of personal records, confirmations,
performance appraisal reports, promotion, retirement settlements, annual increments, filing
of approval applications etc.
Functions of Establishment Division:
Creation and Maintenance of Personal Files: When a person joins Air-India, all the
relevant papers are sent by the recruiting authority to Establishment Division to create
his/her personal files and record card. The following details are entered in the Record
Card of the concerned employee:
Qualification and previous experience
Due date of confirmation
Reflections of any changes in personal details, annual increments, promotions etc
from time to time.
Verification of previous employment and character and antecedents: All the new
recruits are required to fill up the attestation forms that are provided to them along
with the offer letters. On the strength of the attestation form, previous employer
verification and police verification is carried out.
Probation and Confirmation for new recruits: Two reports, namely First Report
and Final Report are raised depending upon the period of probation. If the probation
is for a period of six months, the First Report is raised after 3 months and sent to the
concerned department to fill the report and send it back. If there are any adverse
entries, the same has to be communicated to the concerned employee. The Final
Report is raised after five months.
If the probationary period is of one year, the First Report is raised after five months
and the Final Report after ten months. On successful completion of the probationary
period, confirmation letter is issued to the employee, subject to receipt of previous
employer’s verification and reports on verification of character and antecedents.
Releasing annual Increments: Establishment Division releases annual Increments of
employees in respective grade. These increments are different for different grades.
Raising Performance Appraisal Reports: Respective departments raise
Performance Appraisal reports of unskilled, technical and non-technical staff, which
are filed by Establishment Division in the personal file.
Maintenance of seniority of non-technical categories: Seniority is the respective
grades of all non-technical grades up to grade 14 is maintained in Establishment
division. The seniority list of technical categories, cabin crew, pilots,
engineers/technicians, and general cadre officers etc are maintained by their
Handling Promotion related Activities: All the promotion related exercises i.e.
constitution of promotion panel, preparation of report, issual of promotion letters etc
are handled by the Establishment division, till the rank of officers grade. The
unskilled/clerical grade has time-bound promotional policy and the officers and
executives have vacancy-based promotional policy.
After every promotion, the employee has to undergo the prescribed probation period
for which the Establishment Division raises the probationary report. On satisfactory
probationary report, the employee is confirmed in the grade. After the confirmation
letter is issued, the same is updated in the staff register and record card.
Implementation of Punishment Orders: When Establishment Division receives the
punishment order of an employee; it examines the same and checks the basic pay
stages given in order with the personnel records available in establishment division.
After the completion of the punishment period, it seeks the advice of the concerned
department regarding restoration and informs the Finance department of the same.
Implementation of wages/salary agreements/rectifying pay anomaly:
Establishment Division receives copies of agreements/settlements signed with
unions/guilds and accordingly record cards are updated with the new basic pay stages
for arrear calculation. If any pay anomaly arises when a senior employee
receives less basic pay than his junior, it is examined and rectified.
Final Settlement of Accounts:
Superannuation: When an employee is on the verge of retirement; six months
prior to his/her retirement, letter intimating date of superannuation is issued to
him/her along with a set of 6 pension forms. During the first week of the month of
due retirement, commitment slips are raised to obtain clearance from various
sections/departments. PF/gratuity advice is sent to Finance department, one
month prior to retirement. Final Settlement Advice is sent to Finance Department
after receipt of commitment slips. Service certificate, certification of fresh I-D
Card for issuance of retired I-D Card/CMBS form for medical benefit and pension
form is issued to the retiring employee. Unless the retiring employee vacates the
Air-India quarters, if he is staying there, no CMBS/Pension/I-card is issued.
Resignation: An employee’s resignation is accepted only when the concerned
department/competent authority approves the same and the acceptance of
resignation is conveyed to the employee only after getting due clearance from the
vigilance as well as the finance department. The employee has to give one-month
notice or one month pay in lieu of notice.
Voluntary Retirement: An employee serving the company for at least 20 years
or having reached the age of 55 years can opt for voluntary retirement. It is
necessary to get the approval of M.D along with the clearance from the vigilance
and finance department to get voluntary retirement. Commitment slips are raised
in the first week of the due retirement month. The employee has to give three
months notice or three months wage in lieu of notice.
Death: Upon the death of an employee while in service, obituary notice is
displayed incorporating the family details. Condolence letter, along with the copy
of the obituary notice and set of pension forms is sent to the spouse of the
deceased employee. The Group Insurance section is advised. A copy of the
obituary notice is also sent to the Union, if the employee is a member of that
Parting Gift: Employees who are retiring voluntarily or on superannuation are
provided with a parting gift of Rs 5000/ (more than 25 years of service), and Rs 3000/
(less than 25 years of service), as a gesture of appreciation for the long and
meritorious service towards Air-India.
Service Plaque: A service plaque is also given to the retiring employees as a
Record Management The personal records are maintained for 5 years after the
retirement. However, the files of the employees who have been removed/dismissed or
have litigation pending are preserved indefinitely. The files of the employees who
have passed away in an aviation disaster are also preserved.
Statutory Reports: Statutory reports are the reports sent to the HQ/Ministry etc.
Some of the statutory reports are: 1) Quarterly reports regarding intake of
SC/ST/OBCs employees in Air-India. 2) Monthly reports regarding intake of
minorities in Air-India. 3) Quarterly reports regarding female employees in Air-India.
4) Annual reports of employees promoted during the calendar year.
Non-Statutory Reports: Some of the non-statutory reports are: 1) Department-wise
strength of Air-India. 2) Staff List. 3) Manpower booklet
Filing of Approval application before NIT: If an employee is found to have
committed misconduct, a charge sheet is prepared and a reply is sought from the
The Manpower Planning Division comes into the picture prior to the Recruitment
Section. The importance of the Manpower Planning Division can be gauged by the functions
that it handles i.e. assessment and review of staff requirement in various categories for the
Functions of Manpower and Planning Division:
Determining standard force of all categories of staff.
Preparing and maintaining up-to-date standard force records in India and abroad.
Study and review the existing organization and methods, systems and procedures of
all departments using modern Industrial Engineering techniques, with an objective of
streamlining and determining the manning levels and the total manpower
Assisting other departments in their efforts to restructure the organization,
rationalizing the systems and procedures.
Administration of Monthly Performance/Productivity Linked Incentive (PLI),
maintaining PLI data and review.
Formulating/Review of Promotional policies and implementation of the same.
Developing a manpower plan with five years projection and updating every year,
considering attritions, expansions, specialization, technological advancement etc.
Compilation of job analysis/job specifications in all respects in respect of all
categories of staff, recruitment of which is under this department.
Preparing and furnishing data for employment generation potential for the
Determining recruitment levels in each successive category and trade.
Economy and overtime, casual/temporary employment and improving the utilization
of the existing manpower.
Preparation of annual staff budget for the corporation.
The Inflight Services Department is located in NIPTC, Sahar Airport, Mumbai.
A. Catering Arrangements
The quality of meals provided on Air India flights has been constantly of a high standard.
The quality / quantity maintained have been in keeping with the standard of leading
Catering at Mumbai is done by Chefair, Taj Air and Ambassador Sky Chef and at Delhi by
Ambassador Sky Chef and Taj Air caterers. Chef Air is a division of Hotel Corporation of
India Limited, a wholly owned subsidiary of Air India. At all other stations, catering
contracts is given to local caterers who have considerable expertise in airline catering.
Air India has won awards for its inflight catering and crockery designs. In first and executive
class AI uses specially designed crockery from Royal Doulton of England. The design won
the mercury award in 1994, besides continental food, Indian styled vegetarian / non –
vegetarian with accent on regional cuisine whenever the sector concerned is through a
particular region in India, Chinese and Japanese cuisine, forms a part of the wide variety of
cuisine offered on board.
A. Inflight Entertainment & Passenger Amenities
- Video entertainment consists of latest box office hit movies in English and Hindi and
variety entertainment consisting of popular sitcoms, music videos and sports.
- The English feature movies are available in Japanese on Tokyo sector and French on
Paris sectors. Regional films and entertainment programs in Tamil and Malayalam
have been introduced on flights from TRV / COK and MAA.
- Personnel Vision (PTV) with the choice of six different channels of video
entertainment is currently available on Airbus 310 aircraft.
- Passenger departing on flights from Indian stations is able to see latest BBC world
news, video broadcast on our flights which is pre recorded generally 3hours before
the departure of the flights through an arrangement with the BBC.
- Destination films are shown on flights arriving at Mumbai, Delhi and New York
which gives the general information on seats with the accent on tourism and airport
All security programmes comprising of laid down security measure is prepared and
implemented based on the guidelines / instructions issued by ICAO, IATA and Bureau of
Civil Aviation Security, an apex body regulating and controlling the security aspects of Civil
Aviation in India. All the laid down security measures are compiled in a handbook called
“Handbook on security measures”. The security measures which are implemented at all
Indian and Foreign stations, are given in the security programme file with various countries
where Air India operates. Information on threats as and when received are circulated and
communicated to all stations immediately to beef up the existing security measures.
The Commissioner of Security (Civil Aviation) is the appropriate authority for all matters
pertaining to Civil Aviation Security within India and outside India for National carriers. He
reviews and approves airline security programmes / manuals. The manual is a document
supported by legislation, a cooperative policy or directive by the management or a
combination of all three. The Director – Security is a senior IPS office on deputation and is
assisted by a dedicated team of experienced senior officers and staff. These officers and staff
are having defense and law enforcement background and total strength of security personnel
inclusive of officers.
The main aim of AI security is to prevent acts of unlawful interference or other criminal acts
1) Air India flight operations
2) Air India passengers
3) Air India aircrafts
7) Staff / Ground Personnel
8) Air India property, facilities and installations / airport
9) Acts of unlawful interference / seizure on ground or in flights
1) Superior Customer Service and Consumer Satisfaction
2) Implementation & Unkeep of fail-safe security measures
3) Liaison with other departments and Government agencies for maintaining on time
4) Vigorous loss prevention and revenue protection activities
5) To bring about a total security awareness amongst all employees and perfect
coordination amongst personnel of various departments is a sine qua non for
achieving corporate objectives of Air India to provide safe, efficient, adequate,
economic and properly coordinated transport service.
Industrial Security – Assess control to restricted areas. Example: Plant security, Vital and
vulnerable installations, theft preventions, fire prevention, Union activities, issue of identity
Aircraft security – Round the clock guarding / surveillance while on ground and anti
sabotage checks of arrival / departure / transit and idle aircraft. (manual / computerized
reconciliation), passenger profile etc.
Cargo security – Screening / physical checks of cargo, ensuring 24 hrs of cooling off period
for general cargo. Sealing of cargo containers and escorting for departures.
Flight Kitchen / Cabin Items / Bond stores – Surveillance in pre-setting areas, security checks
of meal cart, company stores loading into high lifts and escorting for departure flights.
Courier mails – Security checks as per Bureau of Civil Aviation Secuirty formulated
OTHER DEPARTMENTS INCLUDE:
Planning & International Relations
Properties & Facilities
Department of Information Technology
Analysis of the Organizational Structure
The organizational structure of Air India follows a divisional structure. The
organization is a composition of 18 different departments formed on the basis of the various
The divisional structure is a set of autonomous units, each typically a machine bureaucracy
unto itself, coordinated by a central headquarters. Since the divisions are autonomous, it
allows middle management a great deal of control. The individual divisions are autonomous
within given parameters.
The divisions represent set of “little companies” that are designed as machine bureaucracies.
The divisions tend to be organized into functional groups, with high division of labour, high
formalization, and centralized authority in the division managers.
The divisional structure is split into self-contained units, able to react to environmental
changes as quickly as small companies, they are also described as multidivisional or 'M-form'
organizations. Managers can develop broad skills as they have control of all basic functions.
Each division is likely to have a devolved human resource function. But there is a risk of
duplicating activities between head office and divisional human resource departments and of
conflict between staff in successful and unsuccessful divisions. The divisional function may
play a coordinating role, reconciling decisions taken at the corporate and business unit levels.
This results in a complex picture of people management.
Strengths and Weaknesses
One of the problems associated with the machine bureaucracy is that the goals of the
functional unit tend to override the organization’s overall goals. One of the strengths of the
divisional structure is that it seeks to remedy this problem by placing full responsibility for a
business function in the hands of the divisional head. So one of the advantages to the
divisional structure is that it provides more accountability and focus on outcomes than does
the machine bureaucracy alone.
Another strength of the divisional structure is that it frees up the headquarters staff from
being concerned with the day-to-day operating details so they can pay attention to the long
term. Big-picture, strategic decision making is done at headquarters.
Department – Wise Structure of Air India
Deputy General Manager
Assistant General Manager
Analysis: Departmental Structure
The individual department structure of Air India follows a simple reporting structure. The
simple structure is low in complexity, has little formalization, and has authority centralized in
a single person.
The strength of the simple structure lies in its simplicity. It’s fast and flexible and requires
little cost to maintain. There are no layers of cumbersome structure. Accountability is clear.
There is a minimum amount of goal ambiguity because members are able to identify with the
organization’s mission, and it is fairly easy to see one’s actions contribute to the
Simple and dynamic environments tend to be associated with the simple structure’s flat
organization with centralized decision making and organic operating core.
The departments of Air India follow the simple reporting structure which makes the
functioning simple and clear. The chain of command is clearly defined and easy to follow.
Indian Airlines: Company Profile
In 1953, a dream took shape - to air link the vast South Asian subcontinent by a
single, modern, and efficient airline. The Airline was Indian Airlines. Indian Airlines,
together with its fully owned subsidiary, Alliance Air, was one of the largest regional airline
systems in Asia with a fleet of 62 aircrafts.
Indian Airlines flight operations centered around its four main hubs – the main metro cities
of Delhi, Mumbai, Kolkata and Chennai. Indian Airlines have always discharged with pride
the responsibility of national and social obligations, linking remote and inaccessible areas
such as in the North-East, or Ladakh on a regular basis. Indian Airlines has been setting the
standards for civil aviation in India since its inception in 1953. It had many firsts to its credit,
including introduction of the wide – bodied A300 aircraft to the domestic network. Its unique
orange and white logo emblazoned on the tails of all its aircraft was perhaps the most widely
recognized Indian brand symbol that has over the years become synonymous with service,
efficiency and reliability.
Departments in Western Region:
- Stores & Purchase
- Ground Support
- Public Relations
- Civil Engineering
- Inflight Services
- Systems & Maintenance
- Flight Safety
Objectives of Indian Airlines Limited
- To strive for and achieve client satisfaction, so that they are able to transform Indian
Airlines into an organization people are happy to deal with.
- Constructive involvement of all employees, so that employees take pride in their jobs,
their organization and themselves.
- Excellence in each and every sphere of activity so that they can refurnish the
Analysis of the Organizational Structure: Indian Airlines
The organizational structure of Indian Airlines is again a divisional structure
similar to that of Air India. The operating departments of Indian Airlines are very similar to
that of Air India.
The divisional structure focuses the attention of employees and managers on results for the
service provided, the customer, or the geographical area.
Divisional structure is flexible and responsive to change, because each unit focuses on its
own environment. Coordination among different functions within the division benefits from
singleness of purpose.
Because each division is a self-contained unit, responsibility and accountability for
performance are easier to target. Each of the divisions are focused and coordinated. Finally,
the divisional structure is also an excellent vehicle for developing senior executives. Division
managers gain broad range of experience in running their autonomous units, which are, in
An organization that has a large number of divisions is developing a number of generalists
for the company’s top positions which is clearly visible in the case of Air India and Indian
NATIONAL AVIATION COMPANY OF INDIA LIMITED
The Government of India, on 1st of March 2007, approved the merger of Air India
and Indian Airlines. Consequent to the above, a new company called National Aviation
Company of India Limited (NACIL) was incorporated under the Companies Act, 1956 on
30th March 2007 with its Registered Office at Airlines House, 113 Gurudwara Rakabganj
Road, New Delhi.
National Aviation Company of India Ltd. (NACIL) is a 100% government – owned
Company, incorporated in March, 2007 and operationalised in August, 2007 following the
merger of Air India Limited and Indian Airlines Limited. It has been entrusted with the task
of providing passenger and cargo air transport services in the country as well as abroad. It
also undertakes maintenance, repair and overhaul, ground handling activities etc. It operates
under the brand name “Air India”. It has subsidiary operations which operate under the name
of Air India Express, Air India Cargo, Hotel Corporation of India, etc. with its Corporate
Headquarters at Mumbai; NACIL has four Regional Offices located at Mumbai, Delhi,
Kolkata and Chennai as well as Foreign Offices across the world.
The Scheme of Amalgamation of Air India Limited and Indian Airlines Limited with
National Aviation Company of India Limited was approved by the Board of Directors of all
the three Companies.
Post merger, the new entity is known as “Air India” while “Maharaja” is retained
as its mascot. The logo of the new airline is a red colored flying swan with the “Konark
Chakra” in orange placed inside it. The flying swan has been morphed from Air India’s
characteristic logo “The Centaur” whereas the “Konark Chakra” is reminiscent of Indian’s
logo. The Corporate Office of NACIL is at Mumbai. In al there are 110 aircrafts.
The Government has approved the appointment of Shri. V. Thulasidas and Dr. V.
Trivedi as Chairman & Managing Director and Joint Managing Director, respectively, of the
merged entity, with effect from the date of merger.
Different Strategic Business Units (SBU) are formed for NACIL. SBU’s like
Passenger Airlines unit, Cargo unit, Ground handling unit, Low Cost Carrier unit,
Maintenance Repair & Overhaul unit, Related business unit. There are different SBU’s head
heading each unit separately. There are Executive Directors under each SBU heads and Joint
Managing Directors (JMD) after them. There are Executive Directors of all four regions.
There will be directors like for Finance, Personnel, and Related Business, etc.
ORGANIZATION STRUCTURE OF NACIL
Designation Work Allocation
- Deputy Managing Director All matters relating to Ministry &
Parliamentary Questions & Liaison
Coordination on Consultative
Committee, COPU, Standing
Committees, Parliamentary Committees,
Hindi Committee, Facilities &
Proprieties’ Maintenance, Medical,
Legal Administration etc. of the
- Director (Personnel) All matters relating to the
Development and effective utilization of
the Human Resources of the Company
and plays the key role in the formation
of Human Resource Development
policies and strategies and their
- SBU Head (Related Business) Head of the Related Business functions
with responsibility for conceptualization
and operationalizing strategic plans for
specific new business identified by the
- SBU Head – Cargo & Director Responsibility for day-to-day planning
(Commercial) and execution of cargo operation.
Marketing & delivery of inventory of
seats produced on the network.
- SBU Head – MRO (Air Frame) Responsibility for day-to-day planning
and execution of MRO (Air Frame)
- SBU Head – MRO Responsibility for day-to-day planning
and execution of MRO (Engine &
- Director (Finance) All financial matters.
ED (Northern Region) Overall supervision of the Northern
ED (Southern Region) Overall supervision of the Southern
ED (Eastern Region) Overall supervision of the Eastern
ED (Western Region) Overall supervision of the Western
Analysis of the Merged Structure: NACIL
Air India & Indian Airlines consisted of 19 and 18 departments respectively pre-
merger. The departments were all similar except for the Properties & Facilities department
and the Planning & International Relations department present in Air India whereas the Civil
Engineering and the Systems & Maintenance departments were distinguished from Air India
Both Air India and Indian Airlines followed the divisional structure prior to the
merger. Post merger it has been an important role to merge the departments of both the
organizations. Though the departments of both the organizations were similar, the
functioning was entirely different. It was important to merge the functions of both the
organizations under one head.
In the case of the coming together of Air India and Indian Airlines to form an entirely
new entity, organizations face difficulty in managing divisional operations due to an
increasing diversity, size, and number of divisions. It becomes difficult for the top
management to exercise strategic control. Here, the concept of an SBU is helpful in creating
an SBU-organizational structure. In multidivisional organizations, an SBU structure can
greatly facilitate strategy-implementation efforts.
The National Aviation Company of India Limited (NACIL) opted for the SBU
structure primarily for the following reasons:
- It aids in establishing coordination between divisions having common strategic
- It facilitates strategic management and control of large, diverse organizations which is
exactly the case with Air India and Indian Airlines.
- It fixes the accountability at the level of distinct business units.
The Sales & Marketing functions which form part of the four strategic business units i.e.
Passenger, Cargo, MRO and GHS can be formed into a separate SBU altogether which can
handle the sales and marketing activities of all the four SBUs.
No access to any documented research of the company undergoing the Merger.
Information regarding actual practices followed by the company was considered
confidential and hence could not be obtained
The process of Merger is ongoing & hence many things are yet to be implemented.
The organization structure of NACIL has jus been drawn out and yet in the process of
Organizational structure is the configuration of the hierarchical levels and specialized
units and positions within an organization, and the formal rules governing these
arrangements. The structure of an organization forms an integral part to the future
functioning and overall success of the organization.
In the study above, the organizational structure of Air India, India Airlines and the merged
structure of the National Aviation Company of India Limited (NACIL) has been studied. The
structures of these organizations have been analyzed briefly.
The organizational structures of both Air India and Indian Airlines prior to merger have been
efficient and effective in their overall functioning. The new organizational structure post
merger which is an SBU structure is still at its implementing stage and hence nothing much
can be commented upon it.
A very important aspect in the selection of the SBU form of organizational structure is to
make it feasible for efficient functioning of the similar as well as the distinguished
departments of both the organizations which though may be termed as the same, share
different ways of functioning.
Books & Manuals
- Air India Practices Book
- Air India: Integration Newsletters
- Organizational Theory…….Stephen Robbins
- Human Resource Management…….K Aswathappa