Air India’s shuffle up

There is a new air of optimism at Air India.

Air India’s recent plan to shift around 19,000 of its employees to its ground handling and engineering subsidiaries hinged on the decision of its employee unions. That fact alone speaks volumes. In all, seven unions were involved in the talks in April; and whilst negotiations were difficult, a decision was finally made.

It has taken a long time for the carrier to realise that splitting up the employee body and creating a separate entity for the ground handling function would be ultimately to its advantage. Analysts believe that such a trimming of the workforce to service the carrier’s needs ought to bear fruit. This step, though, is only part of the approach that will see it try and rid itself of the reputed US$4bn level of debt that is hanging around its neck. Other actions will include the delivery of several B787 Dreamliners, the first of which should start service next year. Their acclaimed frugality should help the airline to the tune of a 20% operational saving. Finally, debt restructuring, courtesy of the country’s banks, will assist in keeping the carrier aloft – and hopefully put it on course for a profitable future.

 

Aid to Air India

The recent decision taken by U.S. Exim Bank to support Air India (AI) financially has been received with mixed feelings. Most American carriers have labeled AI as “one of the most poorly-run airlines in the world,” and have strongly opposed the $3.4 billion loan to it to buy Boeing 787 Dreamliners.

Air India has pending orders for 27 Boeing Dreamliners, the deliveries of which are expected to begin by the end of this year. These are part of the 68-aircraft order placed by the national carrier with the U.S. plane manufacturer.

Personally, I think that AI has caught a huge break. With no financial backing and dipping commercial value, this was possibly one of the last resorts. I’m not really sure but the kudos probably need to be directed towards Rohit Nandan, who recently replaced Arvind Jadhav (no relation to me) as Chairman.

The opposition by American carriers has resulted in the Air Transport Association (ATA), a trade group representing America’s biggest carriers, shooting off a letter to U.S. Export-Import Bank Chairman Fred Hochberg opposing the decision, saying Air India’s financial ill-health should disqualify it from getting American help.

The U.S. Exim Bank had last month decided to give loan guarantees of $1.3 billion to support Air India’s fleet acquisition from Boeing and another $2.1 billion preliminary commitment to support future deliveries of the U.S. aerospace company’s planes to the Indian national carrier.

From a business perspective, I have always believed that financial stability is the key to a successful airline. Profit margin, commercial (face) value, etc follow. The murky waters in the Indian Aviation Market today have made most airlines (read: Kingfisher Airlines) adapt to the oncoming wave.

Flyer fight

It is just one of those situations, where you want to be proud of your country’s airline, but they just keep messing up. I keep looking for reasons to praise the good work done by anyone in India in this field. This past month, though, I wish had never happened for Air India. It started off as a routine strike by the pilots due to wage issues. It then turned into a huge problem for an airline run by the Indian government as the debt increased. Flights were grounded, passengers were left fuming. This really isn’t the way it should be, especially if you want to be called the country’s best airline. The problems begin in the organization. If the important people behind the scenes don’t make the right decisions, it turns into a recipe for disaster. The perfect example would be decreasing benefits for pilots through their wages without their consent.

If that wasn’t enough, a few days later the following happened. 4 crew members of IC-884 from Sharjah to Delhi began a brawl on-board an Airbus A-320 at 30,000 feet. People have read this and laughed, ridiculed at it. But the fact of the matter remains that this type of incident is completely unacceptable. It creates a huge risk and invites trouble through the front door. The crew didn’t deny that they exchanged blows mid-flight, but the speculation remains about the reason behind it all. One of the flight attendants has filed charges of molestation against the pilots and claims that a fellow attendant was defending her against the pilots when the 2 vs 2 brawl began. As passengers looked on with utter disbelief, the 4 of them managed to bruise each other considerably and then get back to work.

A pre-condition to an unsafe act, this incident has not only left a black mark on Air India, but it has also confirmed the suicidal nature of the company. It is wrong to say that such an incident shows how nonprofessional the entire crew of Air India is, but that’s what people are saying. At the end of the day, the customer wants satisfaction, not to be disturbed when he is sleeping by the elbow of the co-pilot after it ricocheted off the attendant’s face. Getting back from this abyss will be very difficult for Air India, and even though they claim that they can, it is near impossible in the near future.

I’m sure the DGCA is fuming over the incident and rightly so. The fantastic four will be lucky if they fly again in uniform. It is just incidents like these and simple decorum that separates the best from the pathetic. I don’t think I’m going to fly Air India again.