AI UNDER Mr. LOHANI

(PART 1 OF 2 PARTS)

It has been about a year since Mr. Lohani took over as CMD of the airline from Mr. Rohit Nandan and perhaps, it is time to review the performance of the airline during this period.

Let’s start with the financial results for the year 2015/16.  We have only seen unaudited figures where initially, the airline indicated an operating profit of Rs. 8 crores and then recently raised it to about Rs. 100 crores.  there has been no explanation for this change, but the Ministry and the airline have taken credit for this so-called turnaround.

It is interesting to note here that the Air India’s website does not show its financial results for the last TWO years - 2014/15 and 2015/16.  Understandably, the audited figures for 2015/16 are still being determined, but why have the results for 2014/15 not been officially declared even after 17 months of the closing of the financial year?

There are a few articles - quoted below - which should raise some eyebrows.

Firstly, an article in The Quint of August 20, 2016 which states:

The government estimates that Air India’s net loss will narrow to Rs 2,636 crore in financial year 2015-16, but analysts suggest that it is largely due to the decline in fuel costs which shored up operating profits for all airline operators.

Air India’s operational profits, analysts say, could also be the result of falling fuel prices and deferment of expenses in the FY 2015-16.

The article goes on to quote Mr. Kapil Kaul, CEO - South Asia, Centre for Asia Pacific Aviation:

“Deferment of expenses may be key to delivering operating profits. Lower service levels, asset productivity, and customer engagement continue to be a challenge and need to be addressed to ensure structural improvement.”

Secondly, an article by Sindhi Bhattacharya in Firstpost on July 26, 2016, which reads:

….According to sources, Air India’s spend on fuel declined from about Rs 8,500 crore in 2014-15 to a little over Rs 5,700 crore in 2015-16. This means a saving of about Rs 2,800 crore straight away. Then, income from sale & leaseback activity was up by about Rs 500 crore. If we add the two figures — fuel savings and income from sale & leaseback — we get about Rs 3,200 crore. The actual improvement in EBIDTA for 2015-16 was over Rs 2,800 crore. From these figures, one might infer that the airline was worse off in 2015-16 since it did not show all the savings — from lower fuel prices and sale & leaseback—as operational profit.

Coupled to the above is an article in Livemint (May 19, 2016) which adds another factor to the picture - passenger revenue actually DECLINED marginally; a fact that the Minister failed to inform the general public.

The deferment of expenses, while it may help the airline and the Ministry in showing a better financial picture, actually hurts the airline in the long run.

This is evident from the numerous complaints about the sad state of the interior of the aircraft.  Here, reference is made to the following complaints highlighted in recent press articles - a few are quoted below:

1. Don’t fly 300 passenger between destinations without AC.
2. Get the rats off your flights as well as lizards.
3. Broken seat back on 48K
4. Emergency buttons in 7 out of the 14 toilets do not work
5. Dirty tray area, broken chairs, torn storage space, life. jackets falling ahead in leg space area.

The Quint, in an article dated August 20, 2016  stated that “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”.

Sindhu Bhattacharya in Firstpost of July 26, 2016, sums it up beautifully (cruelly for the airline) - “As per the DGCA data, the number of complaints against Air India in June exceeded those which were received against market leader IndiGo, Vistara, AirAsia India and SpiceJet together. Since customer service issues are almost a third of all complaints received against Indian airlines, it would be fair to say that there were most complaints in this regard from Air India last month among all domestic airlines.”

AND WE HAVE A MINISTER AND CMD WHO WANT TO RESTORE AIR-INDIA TO ITS FORMER GLORY!!!!!!

DO THEY EVEN KNOW THE MEANING OF THE WORD “GLORY”??????

The same article stated that the Engineering Department has been given the target of year-end to completely makeover the seats.  What has this Department been doing all these years?

Would it be a tongue in the cheek remark to state that the expenses involved in making all necessary repairs will again be part of some “creative financing” so that the airline can show better operating profits in the year 2016/17?