Just when it seemed that things were starting to look up for national carrier Air India, the Mangalore tragedy occurred. Just when the rescue operations got over and the families were still mourning, the engineering & ground staff of Air India went on a flash strike.
Air India was the sole fight operator in India for nearly five decades. It was started by JRD Tata way back in 1932 before the government bought a stake in the 1940s. All the five decades Air India flew both on international & domestic routes. It one of the few airline operators in Asia, that too at a at time when not many countries had their own national carriers. But like any other public sector organization Air India was dominated by the government style of working attitude since they had an absolute monopoly. In 1992 India’s first private sector airline Jet
airways made its entry. In the late 90s and early part of this decade many other private companies entered this sector. It is from this point that things started going haywire for Air India. From being the market leader with over 50% market share (because of its monopoly) till the beginning of this decade it has been relegated to the third position with an abysmal 18% stake. The NDA government had plans of privatizing the airline in 2001 but due to the global aviation turmoil the bidders withdrew from the bid. The merger of Air India (few on international routes) with Indian airlines (flew on domestic routes) spelled more disaster for the national carrier.
Today Air India has a total debt of nearly $10 billion. It has incurred a loss of $1.5 billion for the last few years. To add to its woes are sixteen employee unions which are waiting to go against the management at any given excuse. The total work force of Air India is 30,000, which is three times more than the required number.
Cynics will tell you that Air India is doomed. Primarily for its own mistakes and partly because of unnatural incidents, for instance the Mangalore crash. There is no chance that the Airline can be turned around. Though the airline has taken some steps in the last few months after the new CMD Arvind Jadhav took over the reins. It has appointed four independent directors which include the likes of Anand Mahindra, Amit Mitra & Fali Major to give it a corporate face. It has also cut down on its expenses in the last few months by saving nearly Rs 1000 crore rupees by March end. The company has also appointed a foreign professional chief operating officer, Captain Gustav who takes charge this month. Despite all these efforts, experts will argue that the airline will not survive unless some drastic & valiant efforts are made. Many critics are of the view that the company should be privatized.
The airline can be turned around even under these circumstances. But for that the government will have to get away with bureaucratic way of functioning. Till date Air India is used as a private property by VVIPs. These are so many reports that suggest ministers misusing the airline for their personal use. The government should award autonomy to the management. The company should be treated as a special case; therefore the normal rules & regulations that apply to other public sector units shouldn’t be applied here.
No doubt some tough decisions will have to be taken. This should begin from the top of the pyramid. The company should reduce the top management. They are far too many directors; therefore the government should shift them to other PSUs. There so many sectors were their managerial expertise can come handy. Secondly, route rationalization is the need of the hour. There are so many routes where the airline flies even though it incurs losses. The argument is that it is a national carrier hence it has to fly these routes. But that issue will be sorted once it joins the global star alliance. It will forge numerous code sharing deals with other carriers that would solve that issue. Another major issue is the excess flab thanks to its humongous strength. 5000 employees are expected to retire over the next 5 years. The company should come out with premature retirement schemes which can help them bring down that number to 20,000 in the next 5 years. Another step could be cutting down on the huge flying perks which all the retired employees enjoy. Even the current employees get ‘n’ number of free tickets to fly. All this will have to be brought down.
Perform or perish should be the mantra. The company should set up an independent panel to review the performance of every individual. The ‘laid back’ attitude will have to go. So if the efficiency level is not up to the mark, then the employees should be asked to go on premature retirement in case the person is over 45 or they should be asked to leave.
Unless these tough measures are taken (which can be taken) the airline won’t survive. No doubt that the airline has been the pride of India, but what is the use if that pride if it comes at such a high price.
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