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| June 5, 2000 | ||
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| AIR-INDIA Maharaja in a Maha Mess By Rohit Saran with Robin Abreu
This is Kiran Kulkarni's suggested script for Air-India's (A-I) take-off announcement. A loyal customer of India's national carrier for 20 years, Kulkarni "last" flew the airline in February this year. A combination of suspicious flight cancellations, scant comfort and bad attitude at high altitude has drained the last ounce of patriotism she had towards the Maharaja. Kulkarni is the latest addition to what travel agents jokingly call A-I's Cribbing Customer List. "A-I's mission statement should be 'once a customer, never again a customer'," suggests Joydeep Mukherjee, a New York-based NRI whose family has had -- to put it most mildly -- "not-so-pleasant" experiences with the airline. Another former Maharaja loyalist, Delhi-based Rita Bose, gave up flying A-I two years ago when she realised that her frequent-flier programme had become a frequent-sufferer programme. These are just the symptoms of an ailment that has shattered A-I's lofty image and forced the Government to privatise it on May 26. The airline has accumulated losses of Rs 1,004 crore in the past five years, has withdrawn its direct services from 13 destinations in the past 10 years, and has seen its share in the 11 million-strong India's global air traffic shrink from 26 per cent in 1990 to 21 per cent now. Says Ravindra Gupta, civil aviation secretary and A-I chairman: "A-I's biggest problem is that it has stopped growing." Shorn of bureaucratic caution, what he means is that the country's flag-carrier is just short of getting blown to pieces in the fierce dogfight that has broken out in the open skies over India. And customers are not the only people complaining. Employees are even more despondent. "Our morale is at an all-time low. There is no sense of belonging in the airline. The management hates us, and we scorn the management," says a senior A-I pilot. Reactions from different sections of the airline's 17,916-strong workforce would be variations of the same theme. This is the same airline whose former chairman J.R.D. Tata was once told at Amsterdam airport that people set their watches with the landing and take-off of A-I flights. Today, the airline's prime clients -- travel agents -- find it impossible to vouch for it. Avers Rajji Rai, vice-president of Travel Agents Association of India. "It is difficult to sell A-I even if you want to. Its routes are shrinking, which means fewer ticketing options; its services are notoriously poor and its flights are often cancelled at the last minute, which puts travel agents in a spot." Today, A-I accounts for just about 5 per cent of Rai's turnover. Only a decade ago, the airline contributed a fifth of his business. So disastrous has been A-I's nosedive in the 1990s that it is hard to believe it had posted a record profit of Rs 333 crore in 1992-93; had a 15-year plan to make its fleet the youngest in the world; and was raring to take Indian Airlines (IA) into its wings. Eight years down the line, the airline is trapped in mid-flight, its balance sheet laden with losses, its fleet shrunken and ageing, employee morale at an all-time low and competition on its tail. What has halted A-I's take-off? For those new on board, the profits of the early 1990s were not eked out of a genuine turnaround in the airline's services. Rather, it was fuelled by a 35 per cent fall in the rupee value -- 75 per cent of A-I's earnings are in foreign currency which makes a fall in rupee value a balance sheet bonanza -- and an across-the-board doubling of air fares in 1991 and 1992. But while A-I's profits soared, all plans of restructuring the airline were put on the backburner. This was the time when most airlines across the world were going in for massive restructuring. With governments unable to justify their monopoly of the airlines, deregulation and privatisation were blazing a fiery trail across the skies. Soon these airlines -- freshly trimmed
and slimmed -- entered or expanded their operations in India, which had
just adopted an open-skies policy that allowed greater access to foreign
airlines. Within a year, discounts of 30-40 per cent by competing airlines
started savaging A-I's bottom line, which had anyway begun to crumble
under the mounting wage bill. Thanks to a disastrous performance-linked
incentive (PLI) agreement signed in 1994, A-I's wage bill swelled from Rs
354 crore in 1994-95 to Rs 762 crore in 1999-2000. Add the cost of
transport and boarding, and the wage bill shoots up to Rs 1,100 crore. The
airline's average cost per employee had spiralled to Rs 5,18,061 in
1998-99. Signed amid an unprecedented union-management conflict that had
plunged A-I's punctuality record to a pathetic 55 per cent (45 per cent
flights were delayed), the PLI entailed payment of incentive bonus of up
to Rs 1 lakh a month to all employees -- barring pilots and flight
engineers. Only the incentive were not linked to performance, but were
given to employees for just doing their jobs. "PLI is nothing but
legalised bribe," frets Sanjay Nirupam, Shiv Sena MP and member of
the parliamentary consultative committee on civil aviation. Then came the
purchase of six 747-400 aircraft for which A-I had to pay roughly Rs 5,500
crore over five years since 1995. |
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Welcome
to Air-India's flight AI 111 from London to Delhi. We congratulate you for
having been able to board this flight despite the harrowing
experiences at
our ticketing offices and boarding counters. You may be glad to know that
you are not one of the 40 passengers we have just offloaded. We request
you to keep your demands on our cabin crew to the minimum. Do not bother
us with help requests when we arrive at Delhi. Though we are running 30
minutes late, we take no responsibility if you are not able to catch
connecting flights. If you can, have a pleasant journey."