The Descent of Air India (40 page)

The irony here is that even though all those involved with the airline are convinced about its critical state, they appear to be under the delusion that time is not of the essence. It was as late as January 2013—almost four years after the pitiable financial situation was made public and nine months after the turnaround plan was given effect—that the Ministry of Civil Aviation, not the Air India Board, decided to constitute a committee to suggest ways of reducing the costs. The five-member committee headed by Professor Ravindra Dholakia of IIM, Ahmedabad, submitted in the end of March, 2013, 46 recommendations of which Ajit Singh, speaking to the media, said, ‘[It] will have a far-reaching impact on the airline’s financial health. It is a useful report, which could help implementation of Air India’s turnaround and financial restructuring plans.’The committee studied the experiences of foreign airlines such as Japan Airlines, Malaysian Airlines and Garuda (from Indonesia) with the objective of bringing down Air India’s daily operational deficit of
14 crore. It suggested that the national carrier take a cue from the no-frill airline model and prune costs, including those on its 26,000-strong staff, by conducting a technical efficiency audit for manpower rationalisation. It also said that the national carrier should seek the government’s nod to issue tax-free bonds worth
10,000 crore to enable it to retire its high-cost debt, apart from scrapping flights to economically unviable routes which, they said, alone could result in a net saving of
600 crore per year, adding that fuel efficiency measures could also result in a saving of
400 crore annually. Noting that passengers buy tickets from agents and the airline ends up paying one per cent commission to them, the Dholakia panel suggested shifting to the ‘zero commission’ norm as per the global practice and asking agents to charge a service fee. If the recommendations had been seriously perused by even an amateur observer, it would have been clear that there was nothing in the report that an airline with several decades of flying experience would not have already known. Most of the recommendations had, in fact, been implemented by the management headed by Mr Mascarenhas post-1997, after the airline had recorded its then-highest loss of over
297 crore after gaining from an adjustment of
94 crore as foreign exchange reserve. One can ignore the ‘reinventing of the wheel’ process, but the larger issues to be pondered over are: If the airline needed a panel of ‘experts’ to recommend cost-cutting measures, why was such a panel set up in 2013 and not 2009? Also, does it not conclusively establish that the board of directors has abdicated its functions to the mandarins of the government?

There is no paucity of suggestions for Air India’s revival. In fact, there never really has been a dearth of suggestions on how to restore its former glory. But the question is why these recommendations made by committees, consultants and employees are never implemented and why, given that Air India has been teetering on the brink of disaster for several years, it has never been prodded into expeditious action. The Dharmadhikari Committee, for instance, should have been set up in 2008 when the human resource problem was clearly evident instead of 2011. Similarly, the leasing out of the Air India building in Nariman Point in Mumbai, which is now being contemplated, too should have been done in 2008 if not earlier. This would have given the airline some respite. The airline tends to brush aside such comments saying that its failures are largely on account of the external competitive environment and systemic weaknesses. There is, however, no explanation for the inability of the Air India management to take decisions on issues that are within its control and under its purview, especially during its most critical years. It does not help, therefore, to prepare turnaround plans; it is more important to institute a system that ensures their implementation. Still, we shall, in our final chapter, look closely at the plan and whether the government is finally on the right track with Air India or if it is still shooting in the dark.

NOTES

1
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http://www.businessworld.in/news/finance/the-time-for-talking-is-over/628941/page-1.html

2
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http://www.businessworld.in/news/opinion/columnists/those-air-India-papers/384124/page-1.html

CHAPTER THIRTEEN

murder or suicide?

IN AGATHA CHRISTIE’S detective novel
Murder on the Orient Express
, investigator Hercule Poirot is initially nonplussed by a murder victim who seems to have died from several stab wounds. Some wounds are deep, while some are from barely minor blows. Some stabs seem to have been inflicted by right-handers and others by a left-hander. Before long, Poirot has 12 suspects—each with a motive, but all with convincing alibis—and a stalemate. It is only when he puts all the facts together that he arrives at an unusual conclusion: all of them did it. All of the 12 suspects were extracting revenge on behalf of a three-year-old girl who was kidnapped and killed by the gangster—the stab victim on the Orient Express.

If one were to ask, ‘Who killed Air India?’ the answer would have to be something similar—perhaps all of them. Further, if we were to ask if it was murder or suicide, the answer would have to be that it was both. There were aspects of Air India’s steady decline that had elements of a deliberate abetment of murder, but others that suggest suicide—the people who could have prevented it just didn’t act. Despite the best of avowed intentions, several strategic plans and scores of revival blueprints, the airline has steadfastly refused to emerge from the intensive care unit. Apportioning the blame is an unending exercise, since there is so much of it to go around, and so many to anoint it with.

Let’s go over the list of suspects. Should we blame the government of India, which, as owner, should have been more careful with policy making for the aviation business? Should the Ministry of Civil Aviation, as the administrative controller of the airline, be taken to task for failing to read the writing on the wall even as Air India gradually slipped into a state of coma? Should the board of directors, as the trustees of the airline’s interests and future, be made answerable for failing to draw up a coherent strategy for growth and being silent witnesses—or even active collaborators—to its destruction? Should the successive chairmen of Air India be brought to the stand for abandoning the airline in its hour of need and its senior management for looking the other way? Or what about the employees, including the union leaders, who made unreasonable demands on the airline?

There was never a lack of grandiose plans. Year after year, the people in charge and the airline’s multiple stakeholders spoke about the need to transform the national carrier into a premier airline. But their plans, instead of taking Air India to the promised heights, brought it down. Some of the decisions impacted the financial health of the airline as the expenditures envisaged were way beyond the airline’s means. Some decisions curbed the airline’s ability to meet the competition, while others crippled its revenue-earning potential due to the withdrawal of flights and resultant contraction of network and failure to operationalise strategic business units for ground-handling and engineering services. In some cases, good initiatives were killed simply because of inordinate delays in taking decisions or for implementing the same in a shoddy manner.

What lessons do we draw from this? Air India failed to take action against the people who allowed its survival plans to fall by the wayside. It also chose to stay the course when the paths chosen were leading it nowhere. Why did an airline committed to growth let itself be hijacked by vested interests? And when its appointed saviours proved incompetent or uninterested, why did the government continue to let them hold office? The airline owner’s lack of interest in its well-being leads one to suspect that there was perhaps a deliberate plan to financially incapacitate Air India and marginalise it.

THE LIST OF SUSPECTS FOR MURDER

The question of whether it was murder does not seem so far-fetched when one looks at the comments and recommendations made by two parliamentary committees—the Standing Committee on Transport, Tourism and Culture, headed by Sitaram Yechury, and the Committee on Public Undertakings, headed by V. Kishore Chandra Deo—after they probed the Air India mess during 2008 and 2009. They were extremely critical of the way the airline had been managed and made several pertinent and remedial suggestions—all of which were ignored. The reports corroborate what I have believed for very long: the airline had been let down by the very people who had been entrusted with its care.