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Is Air India heading for Disaster? (N K Singh) July 22, 2009
New Delhi, (NPA): It is not meltdown but the consistent bleeding of country’s premier airline for almost a decade, which has brought it to such a state of affair that it does not have enough to pay to its employees. The financial year of the airline has ended with net loss of Rs 4,000 crores. In eighties the airline was pride of the country and made profit. During late Rajiv Gandhi’s time all the aviation Units viz Air India, Indian Airlines and Airports authority were in profit. All companies were headed by the professional personnel either pilots or management professionals: I happened to be the CMD of International Airports , ex officio Director on the Board of AI and two fliers headed both airlines. It was a time of aviation success stories as all the entities did exceedingly well.

The Government gradually placed the bureaucrats from central services in the airlines and the decline of airlines began. Fortunately Airports were left out and they continued to be in profit but constant interference the government in Airport sector injected its own dilatory system to scuttle its expansion and modernization plans and finally it privatized major airports. To get out of red tape strangling the airports privatization looked the only alternative and has shown results. The case of public sector airlines is a classic model of exploitation by its own people and the government without effective management. It needed strong professional management but it got unaccountable heads and constant expansion of free privileges of the non-aviation persons-be it politicians or government servants.

The market share of various lines clearly shows how Air India is nose diving. An airline which has biggest fleet of 70 aircrafts and 21 on orders has only 15.4% share of the market as shown in April to June. During same period smaller airlines like Indigo has 11.7% share with only 20 aircrafts. Jet has 21% share and King fisher 14% share of the market. It is not a sudden development but the decline has been continuing for years. No one has taken any responsibility nor the government has fired anyone for this gross mismanagement of the airline Air India employs today 230 persons per aircraft against half of it by other airlines. Air India and Indian Airlines were merged in a huff without any substantial gain and for a long time confusion prevailed as to who is flying AI or IA. Sometime even airhostesses, poor girls seemed perplexed, announced in Air India flight that the passengers are in Indian Airlines.

The trade unions have rightly clamored for good management but there is no way unless radical transformation takes place and the Chief Executive has a task to deliver results or get out (not transfer!). Government ownership is a big burden on the airlines and it is better if the route followed for airports is taken for airlines too and privatization takes place. It is a historical record that public sector too can function efficiently provided government gives it autonomy and allow it to carry on its commercial business. One of the best airline and airport in the world is Singapore are in public sector run by professionals. Singapore airline has the most modern and youngest fleet in the world. Can’t we learn from them how government should function? The way red tape, which is the product of state bureaucracy, is holding the investment and development of the country and the same way this malady is slowly killing the airline.

It is time that Prime Minister takes personal interest in throwing out the existing managerial structure lock stock and barrel to bring in fresh management team to take hard decisions, which should not be shirked by the top political leadership in the interest of thousands of employees and the country. No amount of bail outs is going to help the sick airline. It needs a good doctor and the pen pushers of files are neither good doctor nor do they have any stake in the organization.
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