AI UNDER Mr. LOHANI
Part 2 of 2
My attention has been drawn to some other items of financial importance when considering the “operating profit” of Rs. 8 crores - later raised, for yet unexplained reasons, to Rs. 100 crores.
First, the sale of five 777-200LRs to Etihad for $67 million a piece or incurring a loss of ₹800 Cr on the five aircraft. While Etihad engineers sat in the hangers when the aircraft were being readied for delivery, Air India paid huge sums on buying spares for replacement of worn out parts and also because aircraft were being cannibalized.
Secondly, money owed to employees, vendors like oil companies, airport operators, etc which is enabling the airline to save interest. Imagine a scenario if money owed had been paid and the airline would have had to take more loans and paid interest on it.
None of these factors haven't been cited by any one in authority though they have contributed enormously in reducing debt, improving cash flow, etc.
Source: Jitender Bhargava - in the revised edition of his book on the descent of Air-India.
Thirdly, payment of 25%% less emoluments to pilots, maintenance engineers and cabin crew for the past three years. It is common knowledge because the unions have taken the AI management to the Court. Affected employees have also been posting their grievances relating to it on Facebook.
Getting back to what I stated in Part 1, “during checks, officials realized that out of the 66 international aircraft that they fly, the seats of a good 40 percent are unserviceable, causing inconvenience to passengers”.
To a layman, it is quite obvious that if these checks had been made periodically, this situation would never had taken place. I would have thought that a PROFESSIONAL Engineer such as the present CMD would have ensured that preventive maintenance would have eliminated this sorry state of affairs.
Sad, truly sad, what the current and previous managements has done to this once great airline.
And now we learn that the current CMD has been elevated to the rank of a full Secretary to the Government of India. Personally speaking, I believe that the status of Air-India’s CEO should never - repeat never - had been downgraded to the rank of a Joint Secretary. I mentioned this when I wrote to Arvind Jadhav way back in 2009 and told him that he had been downgraded.
In my time with Air-India, the CEO always held the rank of a full Secretary. ACM P.C. Lal was in this grade. Mr. Appusamy was in this grade and, as Dy. M.D., I was in the grade of Additional Secretary which is a rank higher than a Jt. Secretary.
On reflection, one wonders if this “elevation” is personal to the present incumbent or has the post of CEO actually been upgraded and I suspect that it is the former because this is how I read and interpret the actual wording of the “orders”:
“Air India chairman and managing director Ashwani Lohani has been empanelled to hold secretary-level posts in the central government. - See more at: http://www.governancenow.com/news/psu/air-india-chief-ashwani-lohani-empanelled-as-secretary#sthash.nyxVKZmS.dpuf”,
So, is this a “reward” to Mr. Lohani for accomplishing the objectives of the P.M?
Under the current CMD, Air-India embarked on an expansion by adding a few new routes; the credit for two of these must be given not to the CMD, but to the Prime Minister. Let’s take both of these routes:
SAN FRANCISCO.
The P.M. gave a major speech when he visited the Silicon Valley in September 2015. Prior to this speech, there was a flurry of telephone calls to the airline’s CEO with the result that during the speech, the P.M. announced that AI would be starting a flight to California.
There was no preparation usually associated with the inauguration of a new route. There was only a resident Sales Representative whose office was located in the garage of his house. Two relatively senior executives were hurriedly moved to SFO and housed in hotel rooms to lay out the ground work of the operation which took place two months later.
There was considerable confusion regarding the configuration. The intention was to operate only a Business and Economy Class flight, but with little notice, the existing configuration of the Boeing 777 could not be changed and so the initial flights were operated with a 3 class configuration. My information may be out dated but my understanding is that the change has still not been achieved due to aircraft positioning and the inability of the airline to withdraw aircraft to effect the seating change without seriously disrupting flight operations.
Office space was leased but not a single staff was in this office for almost eight (8) months. The only AI staff in SFO was the Airport Manager. It was only very recently, that about 6 posts have been sanctioned of which five (5) are India based officers. The Manager has yet to arrive.
This has been a very hastily started operation which shows that it was not properly planned and was executed entirely because the powers that be wanted this flight to operate.
To Air-India’s credit, it must be said that the route has been a great success with excellent load factors and there is talk of making it a daily operation.
AHMEDABAD - LONDON FLIGHTS
Here again, the initiative was that of the Government and not the airline. The operation of this flight was also announced by the Prime Minister (and not the airline itself) during his speech at Wembley stadium in London on November 13, 2015.
According to someone, apparently, the P.M. was not satisfied and also wanted a flight between AMD and the USA and so, on August 15, 2016 this flight was inaugurated. Interestingly, this was a properly planned inauguration unlike the AMD - BOM - LON flights, which were hastily put together to appease the P.M.
In this connection, it is relevant to quote here an extract from an article by Garga Chatterjee in Firstpost of July 31, 2016:
“The reason that the Union government of India does not want to stop subsidising Air India and divest it is because that will stop the use of Air India as a tool of politics. Air India is subsidised by people of all states of the Indian Union in proportion to the revenue such states produce. Which is why Kolkata and Chennai, both major metros and capitals of states where none of the so-called national parties namely Congress and BJP have held power in the last nearly 50 years or have any chance of winning power in the next 10 years, have no direct connectivity to London, in spite of the respective state government's long standing request on this. Contrast this to the direct flight to London from Gujarat's Ahmedabad, announced by the ex-Chief Minister of Gujarat and the present Prime Minister of the Indian Union during his pubic rally amongst cheering NRIs in the Wembley stadium of London.
Aren't route announcements supposed to be matters of Air India's corporate policy and not a matter of political decision making and announcements? How does Union government get to politically decide where to spend what money, which routes to start where, when the money for Air India comes from all the states of the Indian Union? Air India is a sign of the Union government's limitless power and control over resources of the Indian Union. It is time that the Union government leaves our resources in the states along and stops the present waste of public resources, including indirect subsidies, by selling off Air India to the highest bidder. In a federal democratic republic, the people shouldnt be forced to fund a white elephant called the Maharajah.”
NOTE: Emphasis supplied
On another subject, the CMD recently stated that the single most important Department in Air India is the Human Resources Department. In line with this, he has also articulated, that All Departments and Employees are equally important in the successful running of AI. This perception is radically different from the legacy mindset, where Pilots, Engineers and Cabin Crew were considered to be vitally important to the successful running of the airline.
I have very respectfully to disagree with this assessment. What role did this Department play during the merger? It should have been the “leading light” and worked to the benefit of the employees. Yet, To quote only one example, it took almost 8 years to bring parity in the medical benefits of retired staff of the two airlnes.
Another example is The extreme delay is the parity of pilots’ emoluments of the two airlines. On top of that, is the recent stricture paid by the Indian Supreme Court - read below:
“The Supreme Court on Friday came down heavily on national carrier Air India for repeatedly seeking adjournments in a case involving pay and related matters of pilots and cabin crew.
The apex court was angry after the lawyer representing the petitioners (pilots and cabin crew) said that Air India has sought 21 adjournments citing Attorney General (AG) Mukul Rohatgi's absence.”
Source: International Business Times - Aug 26, 2016
21 adjournments because the airline is not ready with its response. What has the HR Department been up to?
Contrast this attitude of the CMD with those of two eminent former Chairmen of the airlines:
- ACM P.C. Lal served as General Manager of Indian Airlines and later as Chairman of both AI and IA. During his tenure at IA, he was rumored to hold an unfavorable view of Air-India, particularly the Commercial Department. Imagine my surprise when after he became our Chairman and had spent a few months in office and visiting many stations, he said to me “I have always felt that the Engineering Department of an airline is the most important Department as they had to produce an aircraft on time. I am now convinced that in Air-India, it is the Commercial Department that is required to work the hardest. Inder, carry on and rest assured that you have my whole hearted support”.
- Interestingly and coincidentally, JRD Tata held similar views and here I quote: “Despite my special interest in airplanes and the technical aspect of operating them, I have always felt and said, that the Commercial Department of an airline was the most important of all if only because it is the only one that earns money while every other spends it”.
Finally and to end this Post, I quote from the Quint of May 24, 2016:
“Yes, Air India’s Chairman and Managing Director Ashwani Lohani feels the airline’s fortunes will change if the pilots say Jai Hind in their announcement before take off.”
Is this an autonomous Corporation or an arm of the Government? From what is stated in the foregoing paragraphs, I guess the latter.
Sycophancy continues to live and flourish in the Modi Raj just as it did in the Gandhi Dynasty Raj.
Jai Hind.
