Indian Airline NEWS: Air India: The Maharaja in a Royal Mess

Sometimes, perception is everything. And oftentimes, so is reputation. On both counts, our national carrier is taking a beating. Air India, neck-deep in losses, is clutching at its only hope - a Rs 10,000 crore (by ministry estimates) bailout plan. This monumental figure was referred to again by new Civil Aviation Minister Vyalar Ravi in conversations with journalists recently, while adding that he has requested the finance ministry to consider an immediate infusion of Rs 2000 crores into the cash-strapped airline. But '10,000 crore rupees' has been around for the last two years. In 2009, the government refused to oblige even then, demanding the airline implement a turnaround plan instead, through better administrative and operational management. Now, the ministry has changed, but the figure has remained constant, just like the obfuscation on exactly what this amount is made up of. As relations between the management and unions reach an all-time low, with pilots of the erstwhile Indian Airlines threatening to go on strike, the perception that things are going horribly wrong is getting more and more apparent.

If key components of the 40,000-strong workforce are to be believed, the arch villain of this piece is AI Chairman and Managing Director Arvind Jadhav. The CMD's interviews to the media are certainly not helping him in the popularity department. In one memorable interview to Business Standard in 2009, where he ranted against the (then) 32,000 strong staff, the CMD said, "(They are acting) like instead of drinking Evian water, you have to swallow Bisleri! A 15-day pay deferment and morale is low - that is extent to which (they) are pampered" and "Let them go to court, the time for talking is over." And then, just this January, in another interview (this time, to The Tribune), Jadhav said the workforce was now 40,000 - 8,000 more employees since 2009, on his watch! So is the number of employees increasing, even as airline management claims to have implemented a sizeable portion of the turnaround plan, where employees are said to be the primary offenders?

Fact remains, the airline is suffering from a Rs 13,000-odd crore debt, and desperately needs to cut costs and increase profitability before it can hope for any significant infusion from the government. The CMD no doubt has a tough job on his hands - when he says he has no choice but to be 'ruthless', one can see why. The airline is four times more overstaffed than other private airlines, and with all the ills of a public-sector company - top-heavy, administrative mismanagement, lack of transparency. The effort to merge Air India and Indian Airlines has remained only on paper, with both sets on employees still operating under entirely different hierarchies and wage scales. This massive brigade needs to be stream-lined, trimmed and integrated into a productive, profitable whole - and where unions are involved, that's easier said than done.

Which brings us back to the problem of perception that seems to be ailing the airline almost as much as its actual financial woes. Many say the 'attitude' with which the CMD spurns recalcitrant unions has directly lead to repeated strike threats - the most recent one being from the erstwhile Indian Airlines pilots association. Case in point: In accordance with the Industrial Disputes Act, the pilots gave the airline 14 days notice before the strike scheduled for March 9. It was not till the day and night before D-day, that frantic negotiations began with the airline management - that too, only on the urging of the Civil Aviation Minister. Sources in the airline say they were not given any instructions to begin talks till the Minister ordered them to do so.

A marathon 10-hour meeting (with the Chief Labour Commissioner and airline management) later, the pilots have now decided to defer the strike to March 15. The pilots are asking for wage parity with Air India pilots - that is, a fixed pay component that would assure they are paid for 80 flying hours irrespective of their schedules, something which is standard practice across airlines. CNN-IBN recently revealed through an RTI document, how IC pilots' flying hours have come down to a mere 53-55 hours a month, when they are under contract to fly a minimum of 60 hours and a maximum of 90 hours a month. The main reason for the lower flying hours are bad management of pilot roster schedules. But a more damning reason is that the airline has curtailed scores of domestic and international routes, most of them highly profitable ones, with seat load factors of 70-100per cent. The main beneficiaries of these route curtailments have been private airlines, many of which have started new routes at the same time, on the same sectors with practically the same call sign numbers from the very next day. Pilots claim their salary has reduced 40 per cent since the merger, primarily because of these route cancellations and poor management of their schedules that results in them flying less than before. The curtailment of routes has always been something of an open secret, but with the presentation of documents proving these goings-on in meetings with Vyalar Ravi last month, the minister seems to have taken a proactive stand in breaking the impasse.

The Minister also told the media last month that disinvestment is still not an option, and so now, ironically, insiders say, the only hope for negotiations appears to be at the doors of the civil aviation minister and secretary (ex-DGCA chief Naseem Zaidi) who have turned into mediators between employees and the much-maligned CMD. Skeptics say the strike threat is an empty one, but should this threat be carried through, both perception and reputation of the airline at this, its lowest point, could suffer irreparable loss. Cash losses itself could go into hundreds of crores, especially with 90 per cent of the domestic routes and a sizeable portion of international routes (esp to Gulf countries and south-east Asia) being brought to a standstill.

By
Neha Jain

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