Subject: Air India CMD's message to all employees - 16 Jun 2011 Dear Colleagues Greetings You are well

aware that Air India is passing through a very challenging and crit ical phase. Increasing debts, mushrooming interest burden and increasing fuel co sts are financially crippling the company. It is becoming difficult to sustain o ur operations without cash flows and revenue generation. But there is hope. Hope in the form of our esteemed passengers, who despite bein g aware of our innumerable challenges have not left or deserted us. Their faith, confidence and their patronage of Air India has never diminished. Rather, it ha s only strengthened. This is evident in the immediate aftermath of the recent st rike, when their support saw Air India achieve over 82 % passenger seat factor . This is what we need to appreciate, respect and nurture in the days to come. Nur ture, we have to because it is their sustained patronage which would propel our other efforts, including turnaround & financial restructuring plan, to come out of the current difficult times. We need to retain our customers. So each one of us every section, every department: particularly the commercial, marketing and c ustomer care must go the extra mile to provide customer delight. Being courteous and sensitive to all customers should be top most priority . While being courteous to our customers / passengers, we also have to give the sa me priority to our efforts to increase revenue, eliminate wastages and improve e fficiency at every level. For our passengers and to respect their overwhelming s upport, we must strive and ensure that On Time Performance (OTP) is sacrosanct. Nothing less than 90 % OTP every month is acceptable . Meanwhile times have changed. The companys difficult financial situation has led to banks, financial institutions, vendors and suppliers asking for higher costs to cover credit risk. The low cash position over the past few years saw Oil Mark eting Companies putting Air India on cash-and-carry since December 2010 which is h urting our normal operations. The recent strike and consequent huge losses to th e tune of Rs 250 crore forced the company into a hand-to-mouth existence and the lesson we need to take is clear: Disruptions would only damage our ability to g enerate revenue . The management does understand and appreciate your difficulties, arising out of salaries not being paid on time. We understand and share your / your family diff iculty of being unable to meet commitment. But you must be aware that your manag ement has not left any stone unturned to convince the Ministry of Civil Aviation , Government of India and the Financial Institutions about the dire need to infu se more equity without which it would simply not be possible to implement the Tu rn Around and Financial Restructuring Plan. On their part, the MoCA, GoI and FIs have been seeking from us improved achievem ents vis-a-vis our flight operations and customer service. Clearly, we have to e nsure that our flights operate efficiently, customers are looked after and we ar e appreciated for our sincerity, commitment and devotion. Which brings me back t o reiterate that we all have to actually woo and delight our customers? Since it is not possible for every individual to be actively involved in the tur naround implementation process, I call upon each of you to religiously follow an d implement the 10:10:10 mantra of improving efficiency, eliminating wastage and improving revenues. Colleagues in the marketing, sales, passenger terminal, ram ps, reservation, check-in, cabin crew and pilots should all put in their best fo

ot forward so that we are able to redeem ourselves in the near future. Let me also share with you the progress made on Air India Board approved TAP and FRP: 1. As required by Reserve Bank of India, a consortium of Banks under State Bank of India has been formed. 2. Business Plan finalised after reiteration and vetting by M/s Deloittee as sti pulated by RBI. Financial Restructuring Plan (FRP) prepared by SBI Caps. 3. Submission of Business Plans to Ministry of Civil Aviation for operationalisa tion of Engineering and Ground Handling subsidiaries. 4. In principle clearance of FRP by the Consortium of Banks 5. The Justice Dharmadhikari Committee has held meetings and has invited suggest ions. Unfortunately, the very nature of this organisation leads to lot of rumour monge ring and grapevine. Do not succumb to such talk and the only antidote to rumour mongering is to do your job / task sincerely and with devotion so that we can ju stifiably challenge competition. Despite the challenges and negative media atten tion, the competition even today feels insecure of Air India. They fear Air Indi a would be able to secure its rightful position. Clearly we all can do and achie ve this. And please do not expect anyone to single-handedly do every task. I also do not expect you to be told about your job. You are well aware about your responsibili ties and capability. Involve yourself, commit yourself to work and prepare yours elf for major restructuring that is bound to happen. Start aligning yourself to the companys impending requirement as well as the challenge of the competitors. O therwise, there could be a need to cull out the dead wood or the wood that is un willing to respond. Finally, though we tried our best, I am sorry that your salary statement could n ot be released on 8 th June. However, with help from the Government, we have go t the funds released and your salaries would be credited to your accounts soon. Lets work together to ensure such incidents become history. Yours truly (Arvind Jadhav) 16 June 2011