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BW Businessworld

Wake Up, Air India

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I am watching with amazement as the events unfold at Air India. Ever since salaries were delayed earlier this month, the entire mess at the company has suddenly become a sort of national crisis. This is partly because the employees had fooled themselves into believing that they would never face such a day, and no matter how badly their airline did, they were immune. Well, here's a new reality.

There have been a series of announcements emerging from this crisis and some of them are exactly what the airline does not need. One, the aviation minister, Praful Patel, under pressure from the media — which is trying its best to pin the blame on someone — made a statement which has added fuel to fire within the airline. He said: "Some heads will roll." Ever since the statement was made, everyone within the airline is busy speculating which heads that may be. Groupism, politics and insecurity has ensured that whatever little work was being done at the airline has come to a grinding halt. Since he himself is of the view that the failure at the airline is a "cumulative" failure, it would perhaps be best for the government to ask all the internal members of the board to step down. While any one individual may not be responsible for the mess at the airline, there is no denying that the board — especially those members who head individual business units — must have seen the writing on the wall and cannot be absolved of some part of the blame.

The finance ministry — for some odd reason — has issued a directive saying that all government employees must travel by Air India (and Indian airlines for domestic) whenever they can help it. Now just as everyone was trying to draw Air India out of its old protected mould of functioning, I can't see how a silly directive like this will help. Not only would it be a tiny drop in the ocean, it would at best be a very temporary measure (the directive directs those seeking a relaxation of this to approach the aviation ministry on a case-to-case basis).

Another initiative of the government is asking various private sector professionals to join the airline board. Different names such as Ratan Tata, N. R. Narayana Murthy, and even Sam Pitroda are doing the rounds. While this is unlikely to do any harm, it is also unlikely to be of much use since independent board members only have so much say in the running of a company and are not typically involved with the day-to-day affairs. Air India has had N. Vaghul (former chairman of ICICI) on its board for a while, and people within the airline tell me he rarely misses a board meeting. Moreover, private sector professionals — as seasoned ones as Russi Mody and Y.C. Deveshwar — have handled the airline fulltime as its chairman and managing director in the past, but have failed to change the course of the carrier (which was remarkably accurately predicted by Vijay Kelkar in a report produced eons ago). The last thing we need is private sector professionals like these quitting in disgust when they find what little difference they can actually make.

What instead the airline does need is a total revamp of its routes, number of offices (the airline has an office in Moscow, for instance, although it doesn't fly there) and a realistic assessment of the number of aircraft the airline will need. Accordingly, its fleet acquisition programme can be delayed, pared down or if necessary partly even cancelled.

Secondly, someone needs to put Air India's unions in place. Somewhat akin to the villain gangs in a Bollywood thriller, these unions have time and again held the airline to ransom and have in the past extracted unreasonable promises from a weak and often ineffective management. They need to be woken up. Competition is here and it is here to stay. You need to change your attitude, clothes and maybe even undergo some drastic plastic surgery in the face of such competition. Whoever has heard of a private company in the shape Air India finds itself today handing out productivity linked incentives! It's insane.

Third and this is truly the key across all levels — performance must be rewarded and incompetence punished. Around the time the media was going berserk over one of Air India's interminable delay episodes and the passengers' ordeal, I asked a top Jet management official what Naresh Goyal would do if his flight to the US via Brussels was delayed for virtually no apparent reason for, say, 14 hours. His answer was unequivocal: he would fire the guy in charge. Well, it's high time someone in Air India started fixing such responsibility and take a leaf or two out of Goyal's textbook. I may make a few enemies for saying this, but the time for complacence at Air India is over.

anjulibhargava at gmail dot com

(This story was published in Businessworld Issue Dated 27-07-2009)