Air India has been in the news lately for all the wrong reasons. The latest being a mid-air brawl between the pilot and the airhostess. She was reportedly molested and the pilot has been suspended. This comes after a week the AI pilots called off their stir. There was a rare incident recently where a rat delayed a London bound flight. The passengers were deplaned and had to wait in the airport for over 8 hours to get an alternative arrangement done by Air India. There have been numerous outrageous comments by people about the pathetic services it provides to its patrons which I won’t be talking about over here.
Why did Air India stumble into a black hole? News reveals that a series of bad decisions taken over the past few years have cost the airline dearly. Air India & Indian Airlines were formally merged on Aug 24, 2007. In 2 years time the losses sky rocketed to Rs 7200 crore. The carriers around the world have lost money for various reasons like rising oil prices to a slowing world economy. But Air India’s story is different from them because in addition to these reasons, large extents of it are manmade.
Our Civil Aviation minister Mr Praful Patel was the brain behind this merger without sufficient knowledge of the ground reality. The prediction was the merge would lead to cost savings, rationalisation and increased market shares for the airlines. Unfortunately nothing of that sort happened and the airline only plunged deeper into a black hole.
A total mismanagement has caused Air India to be in a state that it is currently in. There were no proper route study, marketing or pricing strategy. There are instances where AI had dry leased aircrafts and operated in a sector with less that 40% load incurring losses and by the time that specific route was developed and started getting full load, the route was shut down because the lease had expired. Would this happen to any other airline? The industry average for a first officer to become a commander is four years. In AI, pilots spend close to 10-11 years as first officers. The inadequate planning for command training from 2003 onwards meant hiring over 160 expatriate pilots and paying them double the salary paid to their Indian counterparts. This again added to the losses.
There has not been any wage scale increase for pilots since 1998. This obviously is against the norms and the management had to do something about it. They brought in a new scheme called Productivity Linked Incentive (PLI) for pilots. A different way of giving more money without changing the wage scales. Now the incentive (PLI) tops at 50-60% of their total wages which inadvertently became their wages rather than incentives. Our new AI boss Mr Arvind Jadhav, like any other chairman had to do something about the losses. He decided to cut the PLI, which means their wages. How can they work? They went on strike.
Air India has ceased to be customer friendly. They are too busy listening to the unions and politicians who have actually over the years run it into the ground. In any business at loss, the first thing to do is to cut cost wherever possible. But instead, the minister announced that no staff will lose their job. It is not wrong to fire people. It is very simple, if you can protect more jobs by cutting down lesser ones purely on grounds of what’s good for the airline, that step should be taken however drastic it maybe. This should also apply to the executive directors.
Job cuts renew an organisation. Fresh minds and new recruits can refresh a firm. If this process does not take place organisations become incompetent and finally die. The leaders need to relook at its assets and operating costs. AI has to become more customer oriented, make them feel special. There should be a leader who is ready to take tough decisions and choices rather than succumb to the staff unrealistic demands and accelerate to self destruction. If these are done AI will be salvaged from its misery, for the threats lie within not anywhere else Or should it be privatised as many other foreign airlines have done so Or should it be allowed to lose its market shares and slowly fade away like many inefficient public sector organisations like HMT?
Source: Various news websites
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