The appointment of Rohit Nandan as chairman and managing director of Air India marks the beginning of yet another attempt by the Government of India to restructure the public sector airline and effect a turnaround. Several attempts made in the past failed miserably, plunging the airline into a deeper financial mess. Air India reached a stage when it could pay neither its employees nor its fuel suppliers. The government has approved a plan to inject fresh capital and a tranche has already been paid. More is to follow this fiscal. But that seems a pittance for a national carrier groaning under a cumulative loss of Rs.22,165 crore plus a debt of Rs.22,000 crore. Air India, which had placed orders for 111 new aircraft, could take delivery of only a few. Since the complaints against its boss Arvind Jadhav were piling up and he antagonised all sections of employees, his continuance in office became untenable. Though the head-hunting committee looked beyond the administrative service for a new head, there were few qualified takers for this crown of thorns and the choice eventually fell on another officer from the Union Civil Aviation Ministry.
The government needs to finalise two plans for Air India — a turnaround plan and a financial restructuring formula. Air India has no choice but to go for the rationalisation of loss-making routes, the rescheduling of aircraft purchases, the return of leased aircraft that are underutilised, the rationalisation of human resources at various levels, and a possible reduction in contractual employment. This will naturally call for across-the-board consultation and consensus building. All sections of employees and their trade unions need to be taken into confidence if these plans are to be implemented smoothly. In a situation where government policy has favoured private airlines for whatever reason, the national carrier desperately needs a level playing field. If the idea is to persuade employees to accept some cuts in existing benefits or concessions, this cannot be a one-sided process. The approach to achieving operational profits for the airline must be balanced, equitable, and just. Ministers and officials must be asked to fly only Air India as a rule and the airline must be paid promptly by governments for VVIP movements and such special uses. Above all, the realisation must dawn on all stake-holders that this looks very much like the last chance to keep the erstwhile Maharaja in the skies.
Keywords: Air India losses, ailing airline, Rohit Nandan
Air India routes make no sense. When one can take most airlines from USA and reach southern cities like Chennai or Bangalore directly (without a stop over in Mumbai or Delhi), AI officals route all AI planes thru Mumbai and Delhi- this leads to people reaching Chennai more than 14 hours later. I have stopped taking AI to Chennai and so have many many others. No wonder AI is losing passengers. AI counter in Mumbai is filled with workers who talk nasty in Hindi assuming no one else understands Hindi. Another is not placing people in a family in seats next to each other. There are no issues when you leave NYC or Newark, but once you reach Mumbai, they put members in a family all over the plane. AI is run by bureaucrats from North India who have no concept of how to treat passengers. Look how Jet airways is routing passengers and learn from it.
The appreciable topic with analysis .But we do not understand how the present government is allowing high officials to run the show without any profit plan and unplaned expenditure,creating a crisis for the employees of this reputed organization.As I know many employees in govt sector undertaking abide by the rules to travel in Air India Flight.I feel major causes of loss is free movement of political leaders with their family members without paying any fare .The whimsical and purposeful decision of aviation ministry has caused this accumulative loss and now the sincere emmployees are facing financial crisis and not receiving their regular pay inspite of their dedicated service in passanger movement. It is simply a conspiracy to declare AIR INDIa as sick and allow private airlines to run in profitable routes.The leaders in parliament should make a strong protest of the activities of present government and also should give weightage to the opinion of trade union leaders.
Getting rid of one Babu and introducing another is the surest way to put the last nail and bury Air India. As a retired Director from AI, I would like to recall the days of 85/86 when I was a member of AI/IC committee to examine the feasibility of merging AI and IC.After deliberations spread over 3 months, we arrived at a consensus, that NO MERGER is necessary. Obviously for financial considerations, this merger took place overriding the employees considerations.Our experience with the Babus in the past has revealed ,what knowledge /ability a technocrat achieves after 30 yrs service in One dept, a Babu achieves in 3 months not only of one dept Like Engineering or Operations but all the 20 Depts. He sprouts intelligence, knowledge even more tha an IIT Graduates like myself. Only ANNA HAZARE type agitation works. I have no specific grouse against the present incumbent.I do not know him.I feel sorry for him, AI/IC is beyond cure,should be split urgently.
Firstly: i would like to say a very good article.Also very rightly said that now its high time that air india needs some restructuring and should also need to learn something from private airline. Moreover government instead of pumping fresh capital into it , should give it a level playing field. Also if in order to turnaround air india there is downsizng and wage cut it shoulld be accompained by other measures of utilization of excess capacity. AS in most cases its only reduction of wages thats done and not much attention is paid to other areas.
The most important act that Air India should play is to treat fare-paying customers with respect and dignity that they deserve and stop pandering to the babus of the government. My other suggestions are: 1) No more upgrades for the Babus and Ministers unless they pay the higher fare; 2) Immediately win-back the high revenue sectors including Dubai, London, Hong Kong and Singapore and put more aircrafts on these routes; 3) Release if needed some of the planes in the lease market and stop the bleeding payments of an ill-conceived aircrafts purchase plan; 4) Recover from the Ex-Minister Mr. Praful Patel, all his benami owned aircrafts and revenues thereof; 5) Investigate all 'payments' and 'corruption' of all former ministers and attach their properties to recover the costs; 6) As there is no productivity when on loss, Stop the 'Productivity-linked' payments to all staff, till the airline recovers its losses fully; 7) Give preferential treatment in Indian airports for Gates to AI
The new head is not going the fix the problem. The problem is the quantity and quality of the existing employees. Air India is overstaffed by 66%. Please identify those 66% people with screwed up Govt Sector employee attitude and fire them. AI will be back in business again. Trade Union needs to go from out of all the labor in India. God save PSU's.
Infusing fresh capital into the loss making company is nothing but wasting preciuos money. With the liberlisation of the economy and particulary avaiaiton sector, the attitude of the staff needs drastic ordernliness. Being in service sector, the arrogant approach needs to be shelved.
Your observations are correct. However, by appointing a bureaucrat as Chairman cum Managing Director, the Central government is merely delaying the obvious; the new appointment is not going to achieve any thing substantial. With accumulated losses in excess of Rs. 22,000 crore, there is absolutely no possibility of turning around the sick Air India. The airline has limited and unprofitable operations and a fat work force. It is naïve and unprofessional to think that the airline’s health can be improve by merely changing the CEO. I believe that there is neither financial wisdom nor strategic thinking in the government’s decision to pour more and more of tax payers’ money in such a company. One wishes that good sense prevails and other options are examined. Of course, it is another matter that no one would come forward to buy such a company.
I am surprised you don't mention the obvious alternative of the government divesting itself of this horrendously expensive white elephant Air India. For your information, all government officials are already forced to fly Air India; this leads to another expensive subsidy: Air India fares are typically 20-30% higher than the cheapest. Also, does one really expect the senior bureaucrats and ministers to behave sensibly? They travel business class, are offered freebies like free companion ticket. Why would they ever give it up? The airline has become a milch cow for them, hence the reluctance to sell it off. In my opinion paying these subsidies to Air India of thousands of crores of tax payers' money is another big scam. The government should just get rid of the airline.
The airlines ,referred virtually as the artery of a nation must regularize its problems as soon as possible. Complete renewal in infrastructural and financial form is the need of the hour. There are examples of politicians and leaders in India who preferred to pay from their own pocket for AIR LINE SERVICES. Taking their pledge,let us aim at its complete reformation.
Is it fair to continue to support and nurture an airline at the cost of the common man. Is there any reason for a government or the people to allow continuance of a perpectually losing proposition. Why there are no sun set laws for public enterprises.
Why the hell should taxpayer money to potentially amounting to tens of thousands of crores be used to bail out an inefficient and defunct organization, especially when we have a big fiscal deficit. All airlines in India are national carriers and Air India is not serving any cause of so called Aam Aadmi. India is a socialist country and government should use its monies for the benefit of Aam Aadmi and not bailing out airlines which are used by minuscule % of population.
It is criminal wastage of public money to run a airline by the government when the same resources can be much better utilized for public endeavors like education or health care. Why does the government need to run an airline in a democracy where there are many private airlines which can do the same much better? If it is do with having air routes to unprofitable regions then come up with another mechanism to achieve the same instead of this charade of an airline which is a national disgrace in its finances and service quality.
Rohit Nandan is merely 'another officer from the Union Civil Aviation Ministry'. He is NOT known to be accomplished in Finance, Operations or the Science of Aviation. He is another file pusher within the army of file pushers. What a fall in AI's stature from the days of chairmanship by the legendary JRD Tata! JRD nurtured AI as his child, paying minute attention even in the selection of designs in the stewardesses' dresses, brooch etc. He strongly believed that AI represented the Indian nation and therefore must present the best that India had to offer. No wonder AI was looked at in awe and admiration then. Since Morarji Desai's removal of JRD, AI has become another venue for the antics of our politicians and file pushers.
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