How not to run an airline

Why has Air India gone into a tailspin?


Sweta Ranjan | May 3, 2011

If one wants to learn how not to run a company, Air India makes the best case study. Government, effete bureaucracy and the spineless management at the top have missed out on no opportunity to feast on the national carrier. The rust covering all the departments of the national carrier has crippled the Maharaja. 

In 2009, the merger of the erstwhile Indian Airlines and Air India was done with the aim to improve the efficiency of the airline. It was felt that the amalgamation of Air India Limited combining the two state owned airlines into a single merged entity would better equip them to survive and prosper amidst fierce global and domestic competition as it would provide an opportunity to leverage combined assets and capital better and build a stronger, more sustainable business. But sadly things have been drastically different. Since the merger, there has been no planning to address the problems of the employees. The HR issues pre or post merger have remained untouched. There was no streamlining of functions for a long time after the merger.

Praful Patel had assured Parliament that the merger would improve the world ranking of the airline and enable optimal utilisation of resources. It has been two years after the merger and the company is plagued by serious survival issues including a huge financial loss, no real integration taking place, a disenchanted workforce and a massive debt that is not letting the airline fly.

Insiders say that everyone wants Air India to go belly up. The obvious intention is to harm the reputation of the national carrier and sell it shamefully cheap. It will surely be one of the biggest buy as the resources it owns including land, human and technical infrastructure will be an asset for anyone.

And the current mess will surely fly the national carrier into bankruptcy. The pilots not ready to fly and the AI management not ready to bend there could be nothing more disastrous than this. No side is ready to blink first. Even the striking pilots have gathered the courage to defy the Delhi high court’s order to call off strike.

If a deep study is done on the demands of the striking pilots it will be very clear that the demands of the pilots are not illegitimate. why has it come to such a pass that pilots have no option other than to strike work? Why have their demands gone unheard and their innumerable notices unnoticed?

There has demonstrably been a discimination in the pay of the pilots of the erstwhile IA and AI. Even working conditions are startlingly different.

It begs the question that when the merger was intended to help the two airlines profit from shared resources, why has there been such disparity?

The striking pilots allege that the management had not adhered to the memorandum of settlement signed in Nov 2009 enforcing the Sixth Pay Commission recommendations.

While the concept of “equal pay for equal work” has been a long-standing principle that has been repeatedly upheld by multiple courts not just in India but the world over, Air India continues to violate it with impunity. Even on the wage issue of Prasar Bharti Delhi High Court passed a judgment to the employees of Prasar Bharati where it stated that there could be no discrimination in the pay of employees holding the same post and doing the same job. The HC in its order stated that “where there is complete parity (in job performed) it would be highly discriminatory to treat employees differently merely on account of the two coming from different sources”.

The pilots are demanding a pay parity with their colleagues working in the same company which is legal and justified but the management has always turned deaf ears to their requests, demands and warnings. How can AI management call the strike illegal and unjust as they have been sent many request letters from the pilots union side to consider the issue? Instead of settling down the issue the management has provoked the union by even delaying their salary repeatedly, forcing a strike upon itself.

AI management should, for the sake of the airline, call for immediate talks with the pilots. Else, the day is not far when the only talk it will be a part of is negotiation for the sale of the national carrier.



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