Recent developments in the Indian Aviation environment have been exciting, pursuant to the governments decision to allow foreign airlines to invest in Indian carriers. This saw the establishment of Jet Airways and Etihad Airlines alliance, closely followed by the Low Cost giant Air Asia setting up Air Asia India in partnership with Tata Sons and the Bhatia's of Telstra.
Now, understandably the Tata's too are jumping in the fray to set up a new full service carrier, with Singapore Airlines. Tata Sons holding in the new entity will be 51% , with Singapore airlines pegged at 49%. Tata's are not new to aviation and are credited with establishing the first airline in India - Air India.
The question that begs an answer is ' What happens to the national carrier Air India ? ' Its no secret that Air India is languishing, both operationally and financially. Were it not for the financial support from the Government of India, it would have been shut long back. As competition increases, so also the woes of Air India, as it is unable to compete, with the modern lean and thin home grown airlines, as well as the foreign carriers, who have siphoned away its long haul International traffic. Air India today incurs losses on most of its International flights. The recent signing of the Jet Etihad deal created an uproar in India, with many saying...this deal will kill Air India.
What is then wrong with Air India, which despite getting enormous financial support from the Government, is yet unable to translate it into profits and efficiency. The answer is simple- Air India continues to pursue outdated work practices and methods, which today have lost relevance. There is an urgent need for a complete and a total overhaul and process re-engineering of its policies and work practices. Unless that is done, no amount of money can save it, as we have seen during the last one year.
The very policies and practices that have brought it to this dismal state, have to be discarded. Pursuit of those policies is akin to perpetuating the rot and decay. With new lean and thin airlines knocking on the doors of India, unless Air India reacts fast, I am afraid, Air India will go the same way as its famous Centaur group of hotels went a decade ago. This hotel chain still exists, its not dead ( government never lets a PSU die ), yet it is worst than dead. As a deluxe chain of Hotels, it has lost its credibility, identity and commercial prowess to survive as an efficient and a robust hotel chain, that it once was. Today no one choses Centaur hotel of his own volition, with the wide choice of other deluxe hotels available.
Similar is the future I foresee of Air India. It will not die, it will not be allowed to die, and neither will it be allowed to become a robust, self sufficient commercial enterprise. It will be more of political and a social apparatus catering to the needs and requirements of evacuation of Indians stranded overseas, operate on the unviable routes and sectors of the North East, and above all continue to indulge in predatory pricing and practices, challenging market forces and other airlines from coming up on their own. In other words, it will become a major obstacle in the growth of Aviation in this country.
If the powers that matter, and if there is genuine will and intent to resurrect Air India, then the 30,000/- crore the government has earmarked for the turn around of Air India, it should call upon a professional private investor to take on the job of Turning Around Air India, with a caveat that the airline has to make profits, within a defined time frame. He should be given a free hand to run and operate this airline as pure commercial enterprise, he should be free to take all and any decision that is aimed at profitability, irrespective of the militant unions and the archaic work practices that have crippled the airline beyond repair. All babus should be told to lay off, as they believe in a slow, and tardy decision making, based on committee, sub-committee and sub-sub-committee. They are good administrators, where they have to administer and implement the decision already taken by their political masters, rather than taking the decisions themselves. They are not capable of doing this. This is management and not administration. Professional management can only be brought about by private players, who have the conviction and confidence of the actions they take.
Still there is time, if the powers that matter are indeed concerned about Air India. If not, then the fast changing and emerging dynamics of Indian Aviation will wipe out the unfits in this fiercely competitive business environment.
Now, understandably the Tata's too are jumping in the fray to set up a new full service carrier, with Singapore Airlines. Tata Sons holding in the new entity will be 51% , with Singapore airlines pegged at 49%. Tata's are not new to aviation and are credited with establishing the first airline in India - Air India.
The question that begs an answer is ' What happens to the national carrier Air India ? ' Its no secret that Air India is languishing, both operationally and financially. Were it not for the financial support from the Government of India, it would have been shut long back. As competition increases, so also the woes of Air India, as it is unable to compete, with the modern lean and thin home grown airlines, as well as the foreign carriers, who have siphoned away its long haul International traffic. Air India today incurs losses on most of its International flights. The recent signing of the Jet Etihad deal created an uproar in India, with many saying...this deal will kill Air India.
What is then wrong with Air India, which despite getting enormous financial support from the Government, is yet unable to translate it into profits and efficiency. The answer is simple- Air India continues to pursue outdated work practices and methods, which today have lost relevance. There is an urgent need for a complete and a total overhaul and process re-engineering of its policies and work practices. Unless that is done, no amount of money can save it, as we have seen during the last one year.
The very policies and practices that have brought it to this dismal state, have to be discarded. Pursuit of those policies is akin to perpetuating the rot and decay. With new lean and thin airlines knocking on the doors of India, unless Air India reacts fast, I am afraid, Air India will go the same way as its famous Centaur group of hotels went a decade ago. This hotel chain still exists, its not dead ( government never lets a PSU die ), yet it is worst than dead. As a deluxe chain of Hotels, it has lost its credibility, identity and commercial prowess to survive as an efficient and a robust hotel chain, that it once was. Today no one choses Centaur hotel of his own volition, with the wide choice of other deluxe hotels available.
Similar is the future I foresee of Air India. It will not die, it will not be allowed to die, and neither will it be allowed to become a robust, self sufficient commercial enterprise. It will be more of political and a social apparatus catering to the needs and requirements of evacuation of Indians stranded overseas, operate on the unviable routes and sectors of the North East, and above all continue to indulge in predatory pricing and practices, challenging market forces and other airlines from coming up on their own. In other words, it will become a major obstacle in the growth of Aviation in this country.
If the powers that matter, and if there is genuine will and intent to resurrect Air India, then the 30,000/- crore the government has earmarked for the turn around of Air India, it should call upon a professional private investor to take on the job of Turning Around Air India, with a caveat that the airline has to make profits, within a defined time frame. He should be given a free hand to run and operate this airline as pure commercial enterprise, he should be free to take all and any decision that is aimed at profitability, irrespective of the militant unions and the archaic work practices that have crippled the airline beyond repair. All babus should be told to lay off, as they believe in a slow, and tardy decision making, based on committee, sub-committee and sub-sub-committee. They are good administrators, where they have to administer and implement the decision already taken by their political masters, rather than taking the decisions themselves. They are not capable of doing this. This is management and not administration. Professional management can only be brought about by private players, who have the conviction and confidence of the actions they take.
Still there is time, if the powers that matter are indeed concerned about Air India. If not, then the fast changing and emerging dynamics of Indian Aviation will wipe out the unfits in this fiercely competitive business environment.
