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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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Please gift Air India to Pakistan. Pakistan will be happy to beat India in one field and it will lead to peace for some time.
A positive and constructive responsive response from the Prime Minister. Now that the drag-sack, Communists Parties, are off its back, the UPA Government should rapidly go ahead like US President Barrack Obama has been doing to redeem and re-position Air India, in line with changing times and increasing competion based on efficient and innovative ways of providing service. It will not be a bad idea to assign the task to a select group of professionals, with vision and proven skills, as the government did in the case of the private sector IT company, Satyam. It might even pave way for privatisation through part disinvestment process. But, time is of the essence and government should move fast.
NOT ONLY AIR INDIA BUT ALL OTHER PSUs SHOULD BE GIVEN THE MANDATE TO DO ALL TO COMPETE THEIR PRIVATE SECTOR PEERS IN INDUSTRY. IN A MARKET ECONOMY GOLDEN RULE TO ACHIEVE THIS WOULD BE TO DRAW LESSONS FROM COMPETITORS AND THINK OUT OF BOX TO PRIVIDE MORE CUSTOMER AMENTIES AND SOPS WITHOUT ANY EXTRA COST OR AT COST BASED OR COST PLUS MARGINAL PROFIT BASED COST. FOR INSTANCE, AIR INDIA COULD TIE UP WITH TAXI FLEET OPERATORS FOR HOME PICK UP AND DROP OF PASSENGERS WITH GUIDED ADVANCE CHECK IN. INSTEAD OF WITHDRAWING FRILLS ON BOARD, IT COULD OFFER BONUS POINT COUPONS ENCASHABLE IN EATERIES, SHOPPING MALLS OR DISCOUNTED IN PURCHASE OF TICKETS BY ARRANGEMENT WITH OUTLETS. THEY COULD TIE UP WITH LOCAL HOTELS AND TOUR OPERATORS AND RAILWAYS TO OFFER TOUR PACKAGES TO GROUPS WITH ADDITIONAL DISCOUNTS IN LEAN SEASONS. TO CORPORATE CLIENTS THEY COULD ALL OF THE ABOVE AT ADDITIONAL DISCOUNTS RELATED TO VOLUMES. NEEDLESS TO SAY THESE HAVE TO COMMUNICATED BY BUILDING IN HOUSE TALENTS.
POLITICAL UNIONS MAY HAVE SOME PROBLEMS HERE AND THERE BUT THERE IS NO POSSIBILITY OF COLLUSION BETWEEN TOP MANAGEMENT AND UNION LEADERS-------A COMPANY CAN BE TOTALLY LOOTED IN STYLE IF THERE IS A COLLUSION BETWEEN TOP MANAGEMENT AND UNION LEADERS------THESE CORRUPT UNION LEADERS WILL BE LESS NOISY BUT WILL OPERATE WITH RUTHLESS SOPHICTICATION---whenever there is a problem both top management and union will blame government, political situation, competitors, recession etc-------UNIONS ARE NOT BLAMING TOP MANAGEMENT --THEY ARE BLAMING THE GOVERNMENT AND THE MINISTER--IN FACT THEY ARE OPPOSING THE IDEA OF SALARY FOREGO BY TOP MANAGEMENT IN JULY--WHY UNIONS SHOULD RAISE OBJECTION FOR THIS? in non political unions there is no system of checks or scrutiny--ordinary employees who raise objection are victimised by management who gives PROTECTION to corrupt union leaders because it serves their interest very well
air india is non bailable
Air India has gone long past wise advice or bailing out,costing the Indian taxpayer thousands of crores; this cannot be frittered away by any responsible person without taking firm and immediate action to deal with the officers' associations and unions first; and giving a completely free hand to one of our many super leaders from the industres taking over the airline. Those with experience in such problems know that any PSU can be made profitable by the right person given all the support, and no interference by politicians and bureaucrats. The country had been impoverished, before the recent economic upsurge, by not so wise bailing out of sick industries to save redundant workers and to win votes. One hopes that our wise Finance Minister will be able to convince his colleagues to such measures , and against the only other option of a bold decision to close down the airlines. Another JRD Tata can never be found; an 'updated' PC Lal can be ,from some of our finest leaders in the world.
Sell AIR INDIA OR KEEP IT IN MUSEUM:Air India , I appeal to government not to infuse any more money of taxpayers in the loss making venture. Dont predict any possibility for recouping losses under the present leadership? Air India is trailing it losses over the years and , in case Govt wants to bail it out then take following steps :1 Curtail/ Abolish free travel in air india by all govt / semi govt staff.2. Reduce top bosses both in terms of number and wages.3. Reduce ground and flying staff.4. Pay allowances in Rupees rather than in US$ .5. Dont sell the prestige properties like Nariman Point , instead explore its commercial potential at huge rentals.6. Mortgage property and assets to bank take loan rather goverment doles money.
Why PM should waste time? He should just through teh AI to privet. The AI servcei is like Indian any Govt Org or politicians way. Yes.If PM wants to bail out them let teh politicins,Govt employees travel and make it mandatory to them.
All Public Corporations should be sold, leased or dissolved one by one including Air India. India should let go of socialism. Let the private enterprise compete and provide services to people. Let the rule of supply and demand apply. Government should not be in involved in running businesses. After Air India, BSNL and Electric company should follow.
Bail out Air India!!! Is that a joke. The airline has been dead for years. One can see the lifeless characters posing as Air India staff wandering cluelessly around the aircraft. Their only aim being to get the maximum benefits for the least amount of work. Let a private company takeover and overhaul it completely
Indian Govt. should not spend tax payers money for this Airline. The employees at Air India are jerks , do not know how to treat paying customers because they know their jobs are safe.Sell it to the highest bidder and don't waste any money.you can do a lot more with that money on 1.2 billion people who does not even have running water.Shame on you, Mr. Prime Minister, you are supposed to be an Economist and can realize the customer service dogma.
Air India should be sold .If no buyer can be found then it should be forced to survive without handouts or fall away. There are plenty of more deserving causes for taxpayers money than an inefficient white elephant.
Mr. Prime Minister - The airline should die a natural death or sold to a private company. Bureacrats are never good at running companies especially the Indian Bureacrats. Don't waste any more precious resources. A few thousand unemployed AI employees will not have any impact on the economy.
The airline needs fundamental changes in ownership structure as well as route sharing with other indian private carriers at the moment i feel more pride as a indian abroad on jet airways or kingfisher than on mismanaged sorry politically managed air india a regular indian does look at air india as a last resort they preffer private carriers or foreighn to air india air india is a shame rather than a pride these things hav been said before but it has and shall always be the same the subcidicing air india hurts all the other private indian carriers and gives a unfair advantage so no improvements can take place coz chachaji in delhi will bail them out
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 situation, this airline will never come up. No use spending money.It is better to close down
Why take half measures? Why not privatize the Airline or make it a PPP and challenge it to become competitive and profitable? A successful, privately operated Air India can be the pride of India as much as what the Govt hopes the Govt owned and operated Air India would be. The Govt is not cut out to run a service based commercial organization as efficiently and effectively as a private enterprise. It is prone to suffer from severe bloatedness. It is not worth accumulating losses anymore.
AIR INDIA MUST REDUCE DIRECTORS FROM 50 TO 10-----40 DIRECTORS SHOULD BE GIVEN GOLDEN HANDSHAKE. SIMILARLY NUMBER OF GENERAL MANAGERS MUST BE REDUCED FROM 110 TO 30---80 CAN BE GIVEN GOLDEN HANDSHAKE-----MOREOVER ALL FIVE STAR HOTEL CONTRACTS IN ALL CITIES MUST BE TERMINATED IMMEDIATELY AND PILOTS AND ENGINEERS MAY BE PUT UP IN NON FIVE STAR AC HOTELS.[why 5 star?]-----catering must be abolished for flights upto 2 hours---internal audit department must be closed--already there are statutory audit and government audit----WHY AGAIN INTERNAL AUDIT--IT HAS FAILED TOP PREVENT ANNUAL LOSS OF 5000 CRORES--IT HAS FAILED TO PREDICT CASH CRUNCH-----INTERNAL AUDIT IS WASTEFUL EXPENSE
This behemoth should be euthanized. Because it is a government owned enterprise, its employees are not sensitive to the customers. They have no sense of responsibility towards the paying customers, and they ill treat the passengers. They know that their jobs and their salaries are safe no matter what they do, no matter how badly they perform their duties. Sell this enterprise to the highest bidder.
There was a time in the early sixties that AI was considered one of the best in the world.Today JRD Tata who started it all and kept the standards high would have been be a sad man. Firstly the concept of pride in a national airline is a flawed one.The Govt should not be in the business of running business-specially businesses like airlines and hotels. Secondly ,will the government at least accept that giving cosy sinecures to bureaucrats as heads of national airlines is primarily responsible for this sorry state of affairs? If AI is to be revived, it should be put under professional management and run as a Corporate entity -NOT like a Department of Ministry of Civil Aviation
Either we should practice capitalism or communism in these matters.In case of capitalism govt shoud not interfere and Air India should be leased out to a competitive bidder...It is not the job of govt to run business houses.If it is communism govt should keep on helping Air India to run even making heavy losses.Under capitalism man will exploit the other while under communism state exploits all!Choice is yours....
Now don't ask the communists regading selling the PSUs making perinial losses. They won't stall the Parliament proceedings as they are engaged with the Maoists. Feeding few white elepants can be sustainanble by tax payers money of 1.16 billion Indian people.
Air India needs to be dismantled and India's pride should be restored in the Airline industry. Time is ripe for that. I have flown once by this about 4-5 years ago; it was my most pathetic airtravel experience. A non-Indian condemned it openly and rightly so, since the Hostess actually shushed him and ordered him to sit in therudest manner, when he requested for a seat change, so he can sit with his family. Air India staff know nothing about professionalism, efficiency and think they can leave everything to destiny, including, serving people on a flight. Barring dire emergency, I will not fly Air India for free, actually, not even if I am paid a million bucks. They are really pathetic and cut a sorry figure among the world's skies,among our private airlines. India needs revamping of its global image, and what better place to start than world-class efficiency in transporting the world's people. So, pardon me, Mr. Prime Minister, but Air India needs to be retired and placed in the museum
Do we want to reintroduce socialism in India? I think the bail-out is a good idea, only if the money is being loaned to the company. Executives and ministers must be made accountable for every paisa. Unless we see that happening, we are going to continue to see millions of our country-men living in penury.
I really cant understand the logic behind bailing out such a company which has not shown any sign of improvements since last decade. "Its just like watering a dead plant".We are hearing that Govt. is thinking of divestitures in public sector companies in the coming budget...then why not AI ?? at least the airlines can get some life and some white elephants can be shown the door.Also there is a news that a Sr. Trainer at Boeing has put forward a petition against AI for neglecting the Aviation security laws and practices... so wasting public funds and bailing out such an airlines can be fatal to the economy, "aam aadmi" and thousands of lives !! Its not a surprise from Congress led govt. they have time and again proved thier indecisive and indifferent qualities towards betterment of nation and its people.
Manmohan Singh has no right to waste tax payer money to bail out Air India. Why should the common man pay to save jobs in Air India. The Government must sell its stake in Air India and exit Air India altogather. It is ridiculous that the Government runs an airline which is not its job at all.