Air India and Indian Airlines: Fighting for Survival?

  • SumoMe

Flying has never been easier. With unlimited options rushing your way, you can glide from one destination to other on your own terms. So whether you’re a business class traveller or can only afford economy fares, many Indian and international airlines are at your command. This was not the case obviously when aviation materialised in full swing somewhere around independence. With Air India and Indian Airlines dominating the Indian passengers, it was slightly unimaginable then, that a day would come when in-numerous airlines, both Indian and foreign , were competing with each other to win the hearts of passengers. It seemed that the glory of flying would be only with these two carriers which are nonetheless Government owned. Today however, things are different.

Air India is in a substantial mess; all news sources will confirm so. The debt ridden airline has had a great fall- big enough to spoil it’s reputation for a long time to come. The entity has been running in losses for quite some time now and as of now has a debt of 5,000 crores which has been publicly stamped across it’s forehead. To make matters worse, the merger which was engineered between the two national carriers i.e. Air India and Indian Airlines, so as to maximise profits is actually resulting in heavy losses. The marriage between the former adversaries were meant to yield benefits as a single airline would avoid overlapping routes and many aircrafts and employees would be free to be engaged for alternative courses and also for the low cost version of Air India – Air India Express . Escalating fuel prices was another reason why the merger was in vogue among the aviation officials. The talks for unification had been going on for years, but ironically or rather unfortunately it occurred soon after Indian Airlines went through a tedious and rather expensive make over process and became Indian. It would be safe to say that when aviation minister Praful Patel and his ministry agreed to this decision, they must have known that both airlines were in heavy debts and that the resultant airline i.e. Air India, will have to wave off losses incurred by Indian Airlines (along with it’s own) not to mention that Air India is now over-staffed ( having 140 employees per aircraft as opposed to 100, prescribed by aviation regulations). Of course, the motive of the entire merger was to bring both the airlines out of their low and point them towards profits. It was estimated that the merger will roll out Rs. 1200 crores in profits by 2010 – a figure which would have been rainfall after a long dry spell for the airlines. Sadly however, ever since the National Aviation Company of India was formed in 2007( parent corporation of Air India and Indian Airlines) it has been able to drown itself in deep loss – $ 3.2 billion to be precise. And now after Air India has been in news long enough, begging for bailout from the Government, the opposition and many others are asking – why was the merger done in the first place. Both Air India and Indian Airlines were better off as competitors despite the fact that they were facing financial difficulties. The cumulative losses of both the carriers before the tie up was not nearly as much as it is now. Yes, their performance was disappointing nonetheless, an issue which was addressed by Praful Patel many a times. But after the tie up, and many agree to this, things have gone from bad to worse.

Every time an embarrassing folly regarding the national carrier is made public, you think it can’t get any worse than this, the very next day you are made aware of something that it even more shoddier. The recent hoo-ha about the pilot strike had just come to a halt when news about cockpit bashing between the pilots and some of the cabin crew bombarded newspapers and news channels, thus hammering the little integrity left with the airline. The unruly behaviour of the flight attendants and the carelessness of the pilots while they were mid-air was a big shock for Air India authorities and even bigger for the passengers on board that disastrous flight, whose lives were at risk. Now, a molestation case against the pilot which is registered with National Commission for Women is a  cherry on the cake. Apart from this Air India is also surrounded by pending lawsuits including the one filed by Boeing for ignoring aviation laws and risking flight safety. Apparently this multi-million dollar lawsuit which is filed by a senior instructor at Boeing (who was posted with Air India for two and a half months to train it’s pilots), is on the grounds that the then CMD (V. Thulsidas) was aware of all the violations and so was the rest of the operational management. In the past Air India, when it was Air India Ltd., has paid nearly 300 crores in two different out of court settlement to save their faces ; and if NACIL decides to bail out this one in a similar manner then definitely Air India is in for another huge financial blow.

As far as the financial mess that Air India is in, is concerned, it can only be defined by the late salary and the slashed incentives which gave rise to a five day pilot strike and cost Air India a lot of money. The bailout of Rs 15,000 crore that national carrier is pleading for from the Government, is another figure that will help put things in perspective. The ill decisions made by the airline in the past along with the out of court settlements have put Air India in jeopardy. And since as of 2007 we are only equipped with one national carrier, more trouble is on it’s way. The Government of India has signed an M.O.U. with Air India to be it’s official partner for the upcoming Commonwealth Games and if the airline continues to function in this manner in coming time, we might just fall on our faces even before the games start. Or worse, the once maharaja of the skies might close down thus rendering thousands of employees jobless and smirking mud on Praful Patel’s face. Right now all we can hope for is that this once glorious royal pauper stands on it’s feet and through some of it’s schemes becomes the humble bowing  red-maharaja again.

Meghna Kriplani

[Image courtesy: http://www.flickr.com/photos/smartjunco/2511439027/]

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