Saving Air India…by Pritish Nandy

Finally Air India has woken up from its coma. It has slashed its ticket rates 15% below that quoted by low cost carriers, starting off what you could call a price war in the domestic skies. Hopefully, this will be the beginning of a series of aggressive marketing measures. Or else, it will almost certainly fly into bankruptcy.

The national carrier has already tumbled from its No 1 position. It’s currently No 4 with 15% market share and struggling to stay there. Most analysts believe that SpiceJet, which is No 5 with 14% share, will soon overtake it. The passenger load is under 60%, lowest in the industry. Others average 75 to 80%. But then Air India has the largest fleet size because, even as it was sinking into insolvency under the dead weight of its accumulated losses of Rs 15,000 crore and huge annual losses that kept increasing, the ministry kept arm twisting it to buy more and more planes. Finally it reached a stage where interest payment on loans became nearly equal to the revenue of the airlines. And why were so many planes bought? No one has an answer.

But this column is not about Air India’s problems. It’s about solutions. The national carrier has lived with misfortune for decades. Manipulative ministers, effete bureaucrats posturing as professional managers, and a third rate management at the top, that crawled when asked to bend have been its persistent tragedy. Everyone treated it as a fiefdom to loot. Nobody wanted it to become one of the world’s finest airlines which it could have easily been. Its much abused unions, overweight hostesses, middle aged pursers, overpaid pilots and pampered staff have been the targets of every critical assessment. But the fact is, despite all this, Air India could have stayed No 1 in the Indian skies if it had honest, capable, committed leadership. That’s where the real deficit is.

The truth is: Everyone wants Air India to go belly up. The clear intent is to discredit the national carrier and then sell it cheap. The short list of buyers is already there. Given the vast properties it owns, the land assets, the human and technical infrastructure at the ground level, it’s a great buy. All the new owner has to do is chuck out the top management and bring in his own team. And, if you ask me, that is exactly why Air India has been driven into such a tight corner– so that one of its rivals can sneakily acquire it. By proxy or through a complex maze of intermediates so that no one will ever find out who bought it. A few years down the line, when things quieten down, the two entities can be merged to become king of the Indian skies. Its true valuation will then emerge. There appears to be an entire bunch of people working to this devious game plan.

Even now, one quick shot of capital and long term debt, an overhaul of its top management, some accommodation by the employees, which will easily happen if someone persuades the unions instead of trying to bully them, and with support from the banks and oil companies (all of which is easily possible since Air India is still a State owned enterprise) the national carrier can be up and running within two years. What it needs is a clear mandate for change, reversal of some recent decisions regarding landing rights, a more aggressive marketing and pricing policy, and a free hand to go and slaughter the local rivals. In six months Air India can bring them to their knees, begging for mercy. Including those rivals plotting and planning its demise.

It’s entirely a game of logistics management, aggressive pricing and effective aircraft utilisation, on all three of which Air India has been fighting its rivals with its hands tied behind its back. The problem is that its rivals have the support of those who actually run Air India and take all the crucial decisions. So how can it compete? At below 60% passenger load, Air India can afford to take any pricing decision that’s required to run its rivals out of business. But will it be allowed to do so? Will it be allowed to restart its most profit making routes which were deliberately stopped and handed over to other airlines? Will it be allowed to fly wherever it finds profitable instead of where the Government wants it to fly? It needs nothing apart from one serious injection of funds and the freedom to take its own business decisions without interference

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66 Responses to “Saving Air India…by Pritish Nandy”

  1. And the tourism in India suffers as well. Though tourists might be coming to India in any other airline, the national airline’s image is linked with the country’s image in tourism. After all the national airline should be linked with the Incredible India campaign and be promoting India wherever it goes.

    • Thats exactly the point. The Givt needs to hold this up for the sake of our national identity. There seems to be very little sense of patriotism to not allow AI to go belly up.

  2. Sharmila,

    This reads like an obituary to the National Airline of a socialist republic – another funeral procession of a public sector enterprise (read government owned business). The post sounds like Pritish Nandy is carrying the earthern pot on his shoulders, reciting “Ram naam satya hai” or “Allah hu Akbar”

    Figuratively, the national airline was not a business venture for the people of the country. It was a logistical service provided by the government along with other things like diplomatic services and citizenship.

    There is a visible change in the operating economic model in the country. This river has changed its course.

    Once upon a time the real assets belonged to people while the governance provided justice. Then, the government confiscated the land and real value of the assets promising equal distribution of the wealth in the name of social justice.

    Today, social justice has a new face. It appears under the banner of philanthropy that is sponsored by private capital of global entreprenurs.

    ===

    Last night I had a good laugh. There was a long march organised by groups of twits tp protest against the omnipresent corruption in government offices.

    I watched the sloganeering crowd from the side walk.

    The traffic and pollution on the road was suffocating. Sweating faces were struggling for oxygen.

    Some of them strolled into nearby malls for a bit of cool air and breathing space.

    Romancing young sunset couples seemed distracted by the standing commotion. I guess they prefer the commotion to keep moving.

    Some photogenic faces were enjoying their 15 seconds on TV cameras while admitting that they had paid bribes for driving licenses, marriage and birth certificates and the likes.

    Policemen, sweating in heavy khaki clothes, were fanning themselves with the pamphlets being distributed by the protestors.

    Civil rights, human rights and divine rights were converted for the moment into a right to scream and howl at the top of their voices – something that jungle creatures are known to do when the weather begins to change for worse.

    Where were the intellectuals? They were languishing in their comfortable holes watching Sri Lanka defeat England on a cricket ground in Colombo.

    • Ha ha ha.. OMG, this is really funny. the first para got me.. heard some rumoours around why AI should be crumbling.. will share it with you sometime.

  3. My Bangalore Diary:

    The vacation is on a roll.

    The TN borders at Hosur, Coimbatore and Mysore are under a vigilance siege. Code of conduct for the TN assembly elections are in force. Every vehicle is searched for cash and condiments for voters and the campaigners at ground zero. The general intelligence is that the cash is being distributed in Tirumala and making its way in smaller quantities by road through Bangalore to Hosur, Chennai, Bandipur, Coimbatore etc. This is good season for hawala operators who get overseas cash into the country and circulate it at the grassroots.

    ===

    In the local markets in Bangalore life has changed little since my visit last year.

    I noticed that the Kasturba Gandhi road (Mrs. Mahatma Gandhi) and the Mahatma Gandhi road meet at one of the traffic circles. Both are designated one-way streets and incidently in opposite directions.

    ===

    I had gone to Chamraj Peth yesterday to my favorite book store and also with the intention of finding a proper barber’s shop nearby where I could trade the crop on my head.

    The book stores owner remembered me from my last visit. He went about bringing out the next series of books recollecting what I had taken last time. He seems to have an idea of how the readers progress from the scriptures to other sciences.

    This time he came up with Tarka Shastra, Tantra Vidya, Yadnyavalkya Smriti, Bhaskaracharya’s Lilavati, Nyaya Kosha etc.

    Some new collections have also appeared on the shelves. Radhakrishnan’s 2 volumes of Indian Philosphy, Osho’s ubiquitous sermons, Advani’s biography and others.

    I picked up Bhaskaracharya’s Lilavati – basic mathematics.

    There was an American woman with her son and daughter in the shop escorted by an Indian woman. The Indian one noticed my choice and asked me to suggest something simple for her guests.

    I asked them what they were interested in. The boy was rather unsure. He was not looking for anything in particular.

    The girl was rather outspoken. “Something of the old scriptures” she said.

    I smiled at the brave tone of her voice.

    “Your are too beautiful for that kind of stuff” I said rather seriously.

    ” O geee” she smiled, “What is good?”

    I gave them Radhakrishnan’s “The Principle Upanishads” and a few introductory books on the Vedas.

    I was amused that while the Indians in the shop were choosing Raghvendra Swamy, Bhakti Kanda, Astrology etc, the foreigners were looking for basic literature. Devotion stood in sharp contrast to discrimination.

    ===

    There are moments in a day when a person is hit by some hard facts of life. I had one such reality byte as I stood outside the Uma theater reading the boards on the row of shops looking for a barber’s shop.

    For some strange reason, probably changing lifestyle, there are no barber shops in BLR anymore. Instead, there are “Hair Clinics” “Beauty Centers” “Parlours” etc.

    I walked a mile down the Appu Road, turned left at the T. Gouda square and voila! there was one called “Aishwarya Hair Clinic (For Men)“.

    The shop was a 10 foot by 6 foot walk-in container. There were three chairs, mirrors all around and 3 young boys who were working feverishly on the lemons of unsuspecting customers.

    Have you noticed that in this city the term “Saar” is not the same as the “Sir” of an English knight. Let me explain.

    One of the barbers called me “Saar, kutgori erade nimisha”

    (BTW, nimisha in Vedic arithmatic is the fundamental unit of Time. It is equal to the time taken for the eyelid to blink under normal conditions)

    A police constable ambled in casually and stared at himself from all angles in the mirrors.

    “Saar,” he said to the barber, “shape maadtirah?”

    “Banni saar, erade nimisha” said the barber, “Uuta aayta saar?”

    “Illa Saar” said the cop, “bandobast duty hogata iddiine”

    Note that each person calls the other “saar”.

    While massaging my head the boy asked me intuitionally, “Saar, neenv teacher iddirah?”

    “Hmmm..?? ” I asked, “How can you tell?”

    “Haage saar” he said, as if it was one of his jobs to guess the occupations of his customers.

    A tea boy came in with small cups of tea for everyone inside. The general busy-ness continued with the tea.

    I left the shop with a general feeling of homeliness. Everyone is a “Saar” here. Service to a customer is not an economic activity among the rotuinely poor. Its a way of life. Nothing to do with money.

    • Correction Spell check: Last para line 2:

      …routinely poor…

    • Reader,

      Too beautiful for reading scriptures? You mean she should rather concentrate on boys??

      Did you at least arm her with a link to this blog and your “Reader’s Digest”?

      • No. No. No. I don’t market my work. That’s done by professionals. I’d rather be incognito in public.

        ‘Too beautiful for reading scriptures’ was not a compliment if you know my style by now. That girl was too young to understand that. Both the kids were perhaps 13 or 15. Not more. They had come with their mother and an Indian lady.

        What I mean by that seriouosly is: Philosophy is not for losers.

      • What makes someone a loser? Beauty?

      • Renate,

        I don’t see a solitary answer to the question.

        Like, there is this warrior in the epic war who asks Krishna why he should kill his own kinsmen to win the kingdom. Krishna says, ‘Don’t talk like a loser.’

        Now, this warrior is not a loser at all. He has won several battles before and killed many people. He knows he is going to win. The only thing that is holding him back in this one is that he has to kill his teachers, peers and brothers.

        It takes Krishna a whole song called The Bhagwat Gita to tell him what he meant by Loser and why he should not discrminate between kinsmen and others when doing his job.

        In that girl’s case, Beauty could be an effective distraction to keep her away from philosophical thinking for many more years.

        I didn’t say it will. I merely made an open remark. She didn’t say it wouldn’t. There was nothing to discuss.

      • A close shave for her… 🙂

  4. Sharmila Says:

    Reader – enjoyed this so much!! How long are you there? Aish will have a good laugh reading the barber shop story. Btw, where are the rest? U don’t sed Renate on ABs blog.. What’s up Renate? You ok?

    • Aishwarya Says:

      Sharmila,

      Reader does have a way with words…

      …and seems like, so do the guys at the saloon…going by the name of the shop…

      😉

      • Aish,

        There are two sections in the shop with a gypsum board partition in between. The left is For Men and the right one is For Women. But the board on the shop is Aishwarya Hair Clinic.

        I didn’t know what to expect till I dared to enter.

      • Aishwarya Says:

        Reader,

        I am glad you didn’t read your newly acquired book and absentmindedly walk into the wrong section…or ask them what the damn partition was for!

        Was it the name that dared you to enter??

        Kidding. 🙂

        Glad you did. It was a funny and endearing anecdote. Thanks for sharing.

        Feels good that even today, there are wonderful people for whom everything is not about money…

      • Some day all these episodes should become a book. I’ll call it “The real nature of politics in India.”

      • Aishwarya Says:

        That’s a great idea! It would make a wonderful read…

      • lol… I swear!

  5. Sharmila Says:

    I meant I don’t see Renate on ABs blog

  6. Anand Khare Says:

    Anand

  7. Sharmila, Aishwarya, Renate, MonaLisa, Anand,

    There’s been a complete communication breakdown since I landed here. I misplaced the old SIM card somewhere before leaving and now the procedure for the new card is mired in red tape. So I am having to do without a mobile phone.

    This space is all the connect I have.

    MonaLisa was last heard of on 23rd March. She seems to have wished me RIP and left.

    Renate is definitely missing in action or on a parallel vacation.

    Aishwarya was not in the hair clinic. She hasn’t posted a comment to this post yet. So, I guess this page is still not on her notification list.

    Thank you for the song Anand.

  8. Sharmila,

    I’m right here. Taking a short break on AB’s blog and will be back eventually.

    I was going to fly with Air India next…. hmmm…

    Reader,

    Been looking for you in all the wrong places. Like Haruspical, and surprised you gave it up so soon.

    • Renate,

      Haruspical has gone cold because I am not online continuously for discussing a subject the way we do. The vacation has disrupted the timings.

      It’s ideal for office hours. I even get paid for the happy hours.

      I wonder whats up with MonaLisa. Have not heard from her since her last epitaph on 23rd.

    • Me neither. I emailed her and no reply. Soon I’ll name my mailbox after Kasturba Gandhi.

  9. Anand Khare Says:

    Reader,

    Sorry to know the SIM story. If it was from my company just let me know the details. I want to evaluate my efficiency.

    Regards,

    Anand

    • Thank You Anand, appreciate it.

      It was a Vodafone SIM. I wish it was BSNL. Shall make sure the next one is BSNL. It has a better coverage in the deep interiors, covers even the remote hamlets.

      Thats one reason I don’t like the idea of dumping Air India, Doordarshan, electrical power distribution and some critical government sectors. They provide services where private sector would not go because of commercial reasons.

    • Ha Ha.. BSNL.. hmmmm

  10. Anand Khare Says:

    Sharmila,

    I am sure you laughed on Vodafone as government sector is not a joke. 🙂

    Anand

    Reader,

    Vodafone is supposed to be a premium company. At least their bills reflect so.

    You are right about the BSNL’s rural coverage. I believe you will find services satisfactory in cities too. It wouldn’t be worse than the MNCs for sure.

    Anand

  11. Anand Khare Says:

    Dabangg’s dialogue,recreated by Dhoni..
    “Afridi aur Akhter se darr nahi lagta saahab..Munaf aur Nehra se lagta hai..”

    • India should win this match easily. I think the hype is way more than the facts.

      India is the numero uno in world cricket. The batting line-up is better than the Aussies when Gilchrist, Ponting etc were in the best of their forms.

      If India bats first pakistan can forfeit the match straight away. They don’t need to make any attempt.

      • True but sadly we have to bowl as well.

      • Let’s hope you are right… remember Brazil….

        Too bad Paul the Octopus is not around any more to predict the outcome.

        One thing is certain – another night without sleep in store for me!

        The SL batsmen are very impressive.

  12. Just reached Ooty after a 13 hour journey by road.

    Anand,

    BSNL covers even the remote forests in Ooty. Once AB and Mohanlal were shooting for some mallu film. They accessed their accounts through BSNL. No other ISP has services in remote places.

  13. The passion and heat of the moment is going to be close to this:

    • Thanks, Reader, this hits the spot!

      I watched Lagaan again last week in my quest to understand cricket better.

      If only the international players were as colorful as Bhuvan’s team….

  14. NZ-SL is getting down to the wire. Any guesses????

  15. Congratulations Sri Lanka! You deserved to win.

    Wait in Mumbai for the Indian team.

    🙂

  16. Anand Khare Says:

    Pak sports minister warned cricket players against match fixing. Because this time he has fixed directly with bookies. Hum kisi se kum nahin.

  17. Today is the day.. when we meet that small flyspeck of a nation.. yes, we have a great batting line up.. but As Anand and Ninad rightly point out there is a Nehra and Munaf we have to deal with too. I hope Ashwin, Zaheer and Yuvi have some good luck. Moreover, what is happening to Bhajji Paaji off late?? Whats the track in Mohali for spinners? any idea ? But, I see us winning this one, and the finals too. Mumbai is the swan dance for two greats, Tendulkar and Murali. Murali gets a wicket in his last ball he has bowled in Sri Lanka in the ODI’s a repeat of what he did in his last Test match too. The WC 2011 is BCCI’s gift to Tendulkar. I think I am going to sob watching Tendulkar play in the finals, being his last!

  18. Reader – How is OOty treating you? I only wish this was a Lagaan moment for us today though!

    • Ooty is cool. Chilling at 10 deg C.

      Don’t worry. We’ll win today easily. We know how to deal with pakistan. I am told that all pakistan players have been issued 2G mobile connections. If they start jumping too much we’ll buy the whole team out. 🙂

  19. Sharmila,

    A few weeks ago Mysore University had offered an honorary D. Litt to Sachin which he has politely declined for the reason taht he is still playing.

    I don’t think he is retiring.

  20. Sharmila,

    I don’t see any big contest in today’s match. We should win it one sided.

    The Mohali pitch is a backyard for Bhajji, Yuvi, Gambhir and Sehwag.

    Sachin, Zaheer, Suresh Raina and Dhoni are among the smartest and coolest cricketing brains on the field today.

    In comaprison, Pak players are like dopes in a dormitory.

    Unless Indian batsmen commit some sort of harakiri this match should be a walkover.

    However, I doubt we can beat Sri Lanka. The lankan bowling battery is formidable. Malinga in full form is unplayable. (Sachin should be held responsible for that. Malinga was just another struggler when Sachin selected him for the IPL Mumbai team in the second season. Nita Ambani trusted Sachin’s judgment. The rest is history. Malinga went on to replace Chaminda Vaaz to become the spearhead of the Lankan attack.)

    I think the Indian batting is going to be tested by Sri Lanka in the finals by Murali’s maya, Malinga’s twisters, Mathews’ illusive fingers and Dilshan’s agonizing accuracy.

    In Mohali, our stop-gap bowlers are going to have fun. Yuvi has never failed at Mohali. Its his home ground. He has grown up practicing on that pitch.

    I hope Dhoni picks Srisanth for this one. Srisanth is the right sort of brat to give the jitters to pakistan in a crunch situation. He can be frustrating in his own way.

    They are slower off-spinners but their fielding is bad. Dhoni has often dropped them because of poor athletic skills on the field.

    So, 9 out 11 players are top class international players. There is a vacancy for two in the tail.

    In my opinion, we don’t need 11 players to beat pakistan. 9 are more than enough.

    With Srilanka it’ll be a different story.

  21. Reader,

    Don’t forget the Sri Lankan batsmen either. Watching Upul Tharanga and Tillakaratne Dilshan scoring their perfectly choreographed centuries in unison against hapless England was something else!

    • Renate,

      Tharanga is elegant and graceful. Dilshan is a power hitter like Siddhu and Srikanth. Tharanga is a newbie. All nerves. Dilshan is predictable.

      The batsman in the lankan squad who have all the tricks up their sleeves are their captain Sangakara and his second in command Mahlia. The two can go on a rampage in tough situations. And these two come in the middle order which is when our main attack is rested.

      India will have to come with an out-of-the-box strategy to befuddle the lankan batting.

  22. Reader,

    Is there any method to your madness? I mean in not capitalizing the P word?

    • There is no method. For me pakistan has a small p sometimes and a big p sometimes. On the cricket ground this time I think they are small p, like peanuts and peacocks.

      🙂

  23. Reader,

    Will you wake me again at 2am or do I need to set my alarm today?

  24. No, EVEN a Mac can’t do that – yet. Still no SIM for you? 😦

    Tonight an alarm will do the job since I am going to watch the whole game, no matter which team starts out.

  25. In fact during the days when there were less number of Aircrafts owned or purchased by Air India it was declared by the goverment that the lucrative routes are being captured by operating the leased Aircrafts by Air India. When the new Aircrafts arrived those routes were closed – the glaring example is that of closing the Los Angeles route.
    Now when there are sufficient number of Aircrafts the merger is being used for killing the air line. To make this point clear I would give an example – Normally no routes run with uniform load through out the year. There is lean & peak season. The merger is misused in this case. Larger Aircraft (Boeing 777) are deployed in such routes during the lean season and the smaller Aircrafts (Airbus 320 / 321 / 319) is being deployed during peak season.
    Unless some severe step is taken to come out of the current situation the future of Air India is bleek.

    • Thanks for this info. From what you say, there seems to be barely any semblance of economies of scale with AI. This is what happens when there is more rust and less steel!

  26. Hope my comment is seen by Mr. Pritish Nandy…

    One thing I have observed very strange with Air India. The Trave Agency sites (like yatra.com etc.) are selling Air India tickets at a much cheaper rate that what Air India’s own website is offering.

    For example a Mumbai-Hyderabad ticket is availble at Rs. 1427 at yatra site for 22nd of April 2011 whereas the same ticket is available at Rs. 2992 at Air India’s own website (flight no. AI). have checked this again today just 15 minutes back. This is happening for last several months. I sent multiple mails to all the mail IDs of Air India that I could find some 20 days back asking them to clarrify the reasons. Nobody bothered to reply. The travel agents are making money and Air India is antagonising people who purchase from tAir India’s own site. Can you imagine this?? You can check the sites of yatra.com and airindia.com right now and confirm… This is enough to break heart of all those who still love to tavel Air India…. Thanks and regards,, Mahtab (cell no. 07666306022).

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