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Air India gets PM’s promise of help but told to tone up

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ENS Economic Bureau

Posted: Jun 24, 2009 at 0913 hrs IST
Air india

New Delhi The Prime Minister on Wednesday committed himself to throwing the “entire weight” of the government behind crisis-hit Air India, but set tough conditions for its help: asking the national carrier to undertake massive organisational, financial and manpower restructuring in return.

AI was categorically told that it would be difficult for the government to give the airline unconditional support every time it ran itself into trouble.

“Air India will have to go for massive cost reduction and increase revenues in both the short term and long term,” Civil Aviation Minister Praful Patel said after a two-hour meeting with Manmohan Singh, at which top ministry officials and AI’s newly-appointed CMD Arvind Jadhav were also present.

“There is excess flab on the entire body of Air India, not only of manpower but due to salaries and the internal functioning style,” Patel said. “The airline will have to improve its on-time performance, aircraft engineering, commercial operations, especially in the face of competition and choice (available to customers).”

Independent directors will be inducted on AI’s board, and the top management of its business units will be recast, the minister said. “The management restructuring will be completed within a month,” he said, adding, “The complete turnaround of the airline may take around two years.”

AI has been given a month to submit a restructuring plan to a new four-member bailout committee comprising Cabinet Secretary KM Chandrasekhar, Principal Secretary to the PM TKA Nair, Finance Secretary Ashok Chawla and Civil Aviation Secretary M Nambiar. The committee will review AI’s performance every month.

The carrier — sunk under accumulated losses of Rs 7,200 crore and a financial outstanding of Rs 30,000 crore till May 2009, and staring at a loss of around Rs 5,000 crore for 2008-’09 — had submitted a highly ambitious bailout wishlist to the government, seeking an equity infusion of Rs 5,000 crore, a grant of Rs 2,000 crore, and a soft loan of Rs 7,000 crore. It had also asked for a review of sixth freedom rights and capacity freezes on foreign carriers, and curbs on domestic airlines.

Patel dismissed suggestions that AI’s Rs-44,000 crore aircraft acquisition plan could be wrecking its finances. “These are two different issues,” he said. “Debt (for aircraft acquisition) is a long term issue. Deferring or rescheduling aircraft deliveries would not help (the airline) at all.”

On fixing responsibility for the crisis, Patel said: “Nobody is accountable. It is a combination of factors. Air India people have not risen to the occasion.” He also cited increases in fuel prices, fall in traffic, lower yields at low fares and the price-sensitive nature of the Indian market as reasons.

Patel was impatient with threats of a strike by AI employee unions. “Let them go on strike. They will hasten their own demise,” he warned.

The unions have threatened to strike work from June 30. CMD Jadhav will meet them in Mumbai on tomorrow.

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,This Airlines will never come up unless privatized. No use spending money by Anwar on 28 Jul 2009

It is best for the Indian airline/Air india to leave to take over a private company so the money will be saved and no need to do same again in future THE Airlines is a glamourous/hospitality industry. Travellers need good service which can be given by dedicated/well cultured employees. Air India is run by the reservations policy. These people are totally unfit to work for airlines. The Cabin crew is so crude and rude that they are not even fit to work as bus conductors. If so who would like to travel by Air India. Besides, the politicians interference in the management and above all Corruption. Under such situationany . These people are totally unfit to work for airlines. The Cabin crew is so crude and rude that they are not even fit to work as bus conductors So advise to government to not to do the

Nothing will change by lky on 27 Jun 2009

I dont think helping air india will do something.Their service is bullshit people who are travelling by AI including myself we pay money but we can't find that service which we should get onboard did anybody eat food which was worse then we get in small hotels,meaning is if AI gets out from the crisis there service will be the same...It's disoppenting that our national carrer is like this......

All Employees Are Not inefficient So Dont Generalise by RAJESH KUMAR on 26 Jun 2009

It is quite obvious from the comments posted on ths forum that some these guys are disgruntled unemployed lot who have not made it in life.Yes the minimum requirement for a Pilot is Class 12 with Physics and Maths but while on the Job he graduates in Avionics. The Minimum qulifiction required to be a Chief of Army / Navy/Airforce is also Class 12! Even for One Hour Flight a Pilot remains on duty for a minimum of 8 Hrs.He generally lives out of suitcases.Has disrupted family life especially ladies. Honestly pays 33 % income Tax.Always remains responsible for the lives of 200 people onboard.Comeon Friend let them have their dues. We are all working in our own spheres. To top every thing else who paid for him to become a PILOT HIS PARENTS who might have taken a loan at hefty rates. Dont grudge them, buck them up.They are a national asset.

measures to improve NACIL by rajeev on 26 Jun 2009

1. inefficient staff should be sacked.2. Overtime makes no sense when Air india has over staff.3. In air india peons comes by car and an engineer comes by local train. whats this?4. All peons/loader etc work should be outsourced.5. Pilots stays in 5 star and their salary should be rethinked and condition should be check in other airlines.6. Availability of Engineer /aircraft should be as required only....no overstaff please.7. No gevernment interference in management decision8. At Management level only qualified and experienced (MBA) person should be there..not pilots like jokers who are only 12th pass in most of the case.9. Independent directors is a good idea.10. If privatised then should go to TATA's only.

Announce the Departure of Air India by Mike Vig on 26 Jun 2009

Air India is as corrupt and irresponsible as any other government white elephant in the country. It sounds so ridiculous how the prime minister finds it a "pride of our country". For the government to put its "entire weight behind" to salvage a company like Air India is sending wrong signals. This attitude only breeds more corruption and fiscal irresponsibility among government fed corporations. The fact is that a perennially mismanaged airline like Air India should be grounded to save the "pride of our country". There can’t be 2 ways about it, Mr. Prime Minister.

no cash for overtime hours worked by ai employees by obama on 25 Jun 2009

There should be no overtime for any body you work your hrs and go home if required then work with out any cash benifit.if some one refuses to stay back suspend him for good, get new young blood for cheap price then these oldies who milk the airline.

Sack all incompetent staff by sanjay on 25 Jun 2009

It is a general feeling amongst all indians that if one secures a job in AIR INDIA he is a real blessed human being who has done some good karma in his past life that he has secured a job with AI, if anybody observes any AI employee, you will notice the kind of attitude they carry, they treat the airline as if it is their hereditary property, they care a damn for the airline, they only want to help themselves of the free tickets and perks offered by the company, AIR INDIA employees are like parasites eating away the airline, it is high time that some kind of 'pesticide' is used to eliminate these parasites who thrive on taxpayers money, the mantra to turn around AI is simple, sell off all the property in prominent places, including the quaters of staff, outsource jobs, sack inefficient staff, reduce the PLI to nil, make the flying staff stay at shared accomadation in one room at all stations, no pickup drop facilities, stop canteen subsidies, cross training of staff, only by these measures the airline can survive this mess, else handover the airline to the TATA's who has the vision and skill to turn the airline around, after all it was their baby, only they can restore it to its former glory

Look into the mirror for the reason for this debacle by paku11 on 25 Jun 2009

I find it funny that people are surprised that AI has come to this. Like everyother govt owned service, this is no different. I once read that one of the AI engines had a duct tape put on to hold the part together! I can bet my bottom dollar that the maintenance crew who did this had no consequences what so ever. The AI staff colonies are located in the best suburbs in major cities. where politics take upper hand than the business matter, this was bound to happen. and guess what? the unions will go on strike, will get paid for thier show and then things will be back to normal, all after our central govt will pay the deficit as requested by AI.Nothing will change. No wonder, everyone in Ind believes in God, as its quite evident, that the country does survive day to day becos of Gods grace. This should be the slap on every Indian's (voters I must say) as we elect this crippled, currupt, selfish, uneducated good for nothing politicians. If you r look'g 4 the reason look in the mirror!!

I.A. - An example of how Bureaucracy kills businesses by Paurush Sonkar on 25 Jun 2009

I.A. had been known to pay much more than other airlines. Even if we discount this thier staff who gets paid much more has very low servicing standards and yet they dont seem to have taken note of how other airlines even low cost are going head over heels to please the fliers.The Government has ruined the airline owing to thier setupA few things I.A. can do:1. Reduce Salaries across2. Chuck those beyond a particular age (They have airhostesses who are in thier 50's)3. Sell huge properties they have across India where they have thier colonies4. Reduce routes that are loss making5. Trim staff and Perks provided (Why must the staff stay in a 5 star when a 3 star is good enough)6. Corporatise I.A. and drop Government interference to sub zero levels

Do or Die by Zarir Mistry on 25 Jun 2009

Shape up or ship out! AI must rid itself of all the flab it has over the years and political Big Brother Blessings on the chosen few must end.We are a disgrace to the international community and the laughing stock of all.The glorious years of the Maharajah, alas, is no more.Privatising is the only answer and let the incompetent heads roll.No guesses for who should be given the keys ot the Maharajah's Palace!

MESS UP OF AIR INDIA by M SRINIDHI on 25 Jun 2009

REASONS BEYOND EMPLOYEESTILL THREE YEARS BACK IA WAS RUNNING UNDER PROFIT. HOW SUDDENLY THE AIRLINE HAVE BECOME LOSS MAKING.THE MAIN REAONS ARE:1. Merger of loss making AI with profit making IA (Earlier merger of loss of Vayudoot with IA)2.It took the government over ten years to permit the airline to expand its fleet — just a couple of years ago the original Air India was operating a fleet of 35 aircraft, most of them leased. This inaction allowed private operators and foreign airlines to take away market share from the Maharaja.3. Open sky policy when there is global recession4. Ill-timed acquisition of a huge fleet of a/c 5.When the new a/c are under utilized the idea of Wet leasing two CJR

sell it lock stock and barrel by Musafir on 25 Jun 2009

Air India is bloated inefficient white elephant the more money the Govt pours tax payers money into it the more losses it will undergo. Tax payers have to feed the inefficient blokes who run Air India. Better to sell it lock stock and barrel

AI- SOCIAL FACE by raj on 25 Jun 2009

WHO HAS MADE IT A WHITE ELEPHANT? REPLY IS MINISTRY'S INSTRUCTION ON DAY TO DAY WORKING. WHERE TO OPERATE , AT WHAT FARE AND WHOM TO GIVE CONTRACT ETC ARE FEW EXAMPLES. LET ME TELL YOU THIS ORGANISATION IS PERFORMING MANY SOCIAL RESPONSIBILITY MANY TIME AND EVEN NOW NO AIRLINE CARRY ANY HUMAN REMAINS(DEAD BODY) BUT ONLY THIS 'WHITE ELEPHANT' CARRIES IT.

Fire the incompetent staff - management by Vivek Anand on 25 Jun 2009

Air India cuts a sorry figure and gives the country a very bad name in it's current state. I'ts certainly not rocket science to fix it. Stop the waste, stop the corruption and fire the incompetent employees. I can never forget my maiden and last AI flight from Delhi to Tokyo a few years ago. Badly maintained aircraft with rattling roofs, no variety of drinks available, bad bad service. Never dared to fly AI again - it was scary. I was feeling more sorry for the Japanese passengers who made the mistake of trusting India's flagship carrier.

Program Manager by Vivek Anand on 25 Jun 2009

Air India cuts a sorry figure and gives the country a very bad name in it's current state. I'ts certainly not rocket science to fix it. Stop the waste, stop the corruption and fire the incompetent employees. I can never forget my maiden and last AI flight from Delhi to Tokyo a few years ago. Badly maintained aircraft with rattling roofs, no variety of drinks available, bad bad service. Never dared to fly AI again - it was scary. I was feeling more sorry for the Japanese passengers who made the mistake of trusting India's flagship carrier.

Change the looks by SG on 25 Jun 2009

This might look really funny, but firstly they must change their looks and the way people look at Air India. They must get a complete makeover - change the air hostess, change the airport staff, put more active members, give the flights a complete makeover with refurbished seats and finally on time running. These will take some doing without which they will fall flat for sure.

AI by raj on 25 Jun 2009

And doing this spend further crores of Rs which this minister has been asking AI to do so for past 5 yrs by first changing it from Indian airlines to Indian and than merging it with ailing AI

sell out by Rahul on 25 Jun 2009

why do we need a govt controlled airlines.. sell it and it will get profitable in a yr.. right now they dont fear that their jobs r in line of fire if they dont perform ..let them feel the heat so that good work come out of them ... the purpose of business is to provide comfortness to the society and empowerment of country .. a loss making company cant serve either. so it must be more proffessional and cushion should be taken out of its back,

The silent killing of an airline..... by A READER on 25 Jun 2009

The sudden outburst created by the news of Air India's losses is surprising. People seem to react to the obvious. What was one expecting with sagging management poilicies, delayed beauracratic decisions and a complete negligence on the part of the Government towards the slip in many key areas. The hired manpower was let loose and allowed to laze, while key areas were outsourced, maintaing dual staff for single work. Schedules were static and not dynamic, no training/ appraisal programs done to improve existing staff quality. Agreed a part of the staff was diseased to be lazy, but the govt turned a blind eye to this raising epidemic which was severely contagious and lethal enough to paralyse and finally kill the airline. Why blame staff now? The lack of efficient monitoring by rhe gove has led to this killing of the airline

CONSULTANT AMEURASIA/INDIA by NAYAN M.DESAI on 25 Jun 2009

1.FILE FOR BANKRUPTCY2.REMOVE ALL THE CHAIRS AND GIVE AS A GIFT TO INCOMPETENT MINISTERS,SENIOR MANAGERS OF GOVT.OWNED COMPANIES AS A FAREWELL GIFT.MAKE IT UNUSABLE OTHERWISE HE/SHE WILL SELL IT.3.SELL AS A CARGO CARRIER TO INDIAN COMPANY OR LEASE OUT PLANES THROUGH PRIVATE COMPANY.SELL 'AIR INDIA' NAME SEPARATELY.4.NOT A SINGLE RUPEE BE SPENT ON DINOSAUR ON GROUND,DODO IN THE SKY.5.IF ANY ONE WHO WORKED DILIGENTLY WILL HAVE NO PROBLEM FINDING JOB WITH PRIVATE COMPANIES.6.PRIVATISE MOST GOVT.COMPANIES.YOU HAVE TO PRODUCE IN PRIVATE COMPANY.7.AIR INDIA DODOS CAN BECOME POLITICIAN SINCE THERE IS NO POLITICAL COLLEGE CERTIFICATION REQUIRED FOR ETHICS,INTEGRITY,NORMS,MORES,GENERAL KNOWLEDGE,INTRICATE,SPECIALISED KNOWLEDGE OR ANY OTHER PREEQUISITES TO BE THE POLITICIAN.

How many BPL does it take to pay an AI babu ? by K.Suresh on 25 Jun 2009

Why should the PM bail out AI ? Remember - A hundred Indians are forced to live below poverty line to pay a babu employed in the bloated white elephant called Air India. Now another hundred go down to pay for the sins of mismanagement.

Air India Loss by Rajeev on 25 Jun 2009

Many Indian working in private sector have lost their jobs due to recession, no support is given to them. But on the other hand Govt seems to be very partial on supporting such always sick High profile Corporations. All tax payers money is being wasted on them and then Govt starts searching for ways to burden more on the Tax payers.

Why is AIRINDIA unable to compete with even a small city State like Singapore? by paluvakka on 25 Jun 2009

This is something that simple folks like me never understand. Singapore, a tiny little city State whose GDP is about 1% of India's.( Correct me if I am wrong).But Singapore Chinese have been able to operate one of the best International Airlines that flies to more destinations than AIRINDIA which has been in flying business for a longer period than SIA. What is wrong with our CORPORATE THINKING? Why have we failed to compete effectively with smaller nations like Singapore and city Admin like Hong Kong and even UAE? Same thing applies to Singaporeans and Malaysians of Indian origin, their mentality moves around small retail outlets, small textile shops and small restaurants. In Malaysia for instance the Chinese have about 300 huge Public Limited Companies, where as the Indians have not even 10 large Public Limited Companies. Indians need a massive change in their business mission and vision.

tax payers please stop paying tax by sarma on 25 Jun 2009

anything that has a govt label stinks just like govt and its chor company.it has decayed for a long time , please let it die and you people who are corrupt should also decay and die

PAST PRIME by V.P.Krishnan on 25 Jun 2009

It is high time that the staff at AI are told in no uncertain terms that either they work or get booted out.The airline which functions like a bus service creeking to its roots should disengage itself of all extra luggage and become slim and fit.Time schedule maintenance should be strictly adhered.Simply calling it as the national carrier does not solve the problem.

Air India by Dr B Sundara on 25 Jun 2009

It appears right men were not managing the affairs of the airline.Otherwise such a mess would not have been created.Most often we find wrong men in right place and vice versa.The Minister's statement that nobody was accountable sounds inconvincing.Those who manage the affairs should be accountable. Complete restructuring the operations on professional lines is now required.Many of the PSUs are not competitive enough.(HMT watches are nowhere to be seen.)AI is operationg along side private airlines. And hence, unless it is competitive it cannot servive.A thoroghly professional management is required.

NEED FOR COMPLETE OVERHAUL by B S GANESH, BANGALORE on 25 Jun 2009

Manmohan has given a good idea. Let the board of directors and top boses reduce their salaries or even forgo it in public and country's interest. Let them not reduce salry of poor employees. Process corruption cases and recover ill-gotten money with interest Improve customer relations to make more travellers use AIR INDIA. Let all politicians and government officers must use on Air India. I think these are some of my suggestions. B S GANESH, BANGALORE

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