The Descent of Air India (38 page)

Mr Jadhav also appointed a host of external consultants during his tenure. This was done at a huge cost to the airline; but what was the outcome? Not a single report or recommendation was implemented, and Air India continued to sink lower and lower every passing day. An article that appeared in
Business World
(‘Those Air India Papers, 10 February 2012) at the time read: ‘I came across what must be the nth report on Air India (we need a Wikipedia on these) and its possible turnaround plan. This one is a critique of the latest plan prepared by a bunch of bureaucrats in October 2011. I am, by now, convinced that the government is full of the deaf and the dumb who just cannot comprehend what they have been told repeatedly by a series of consultants, former bureaucrats and technocrats over the past 30-odd years.’
²
The author went on to say that Air India was losing close to ‘
250 crore every month’ and SBI Capital, Booz Allen and Rothschild were all appointed to guide the airline on drawing up a roadmap, cost rationalisation and debt restructuring strategies. But ‘their reports were never accepted by the board (CMD Arvind Jadhav was at loggerheads with many board members and senior officials) and I do not think Booz Allen ever got compensated for its efforts.’ The article was scathing about the manner in which consultants were being appointed and how, after having been assigned the task, their work was being discredited by the management.

We were also witness to the strange spectacle of the board approving an overambitious proposal to halve payouts under the controversial Performance-Linked Incentive (PLI) and the unions refusing to comply with its decision. The PLI scheme, which had very little to do with productivity, had been bleeding the airline dry, but the unions were adamant that it should stay. The board, on the other hand, unmindful of the airline’s troubled relationship with its unions, ordered that the incentive payments be cut by 50 per cent. The net result was an unresolved stand-off between the unions and the management, which meant that Arvind Jadhav could not reduce the wage bill by a single rupee. Meanwhile, airlines the world over, including India, managed to lay off staff and invoke a 10–15 per cent cut in the salary bill to tide over the crisis inflicted by the economic downturn of 2008. If the board had set a more reasonable target, the unions may have come around. But that was not to be, and in the end, Air India was saddled with a mounting wage bill, which it could not afford. Salaries were delayed by a couple of months, and the PLI payments were delayed by four months, till the scheme itself was replaced by an enhanced basic wage structure based on the guidelines of the sixth pay commission in July 2012, a plan endorsed by the Dharmadhikari Committee. It remains to be seen, however, whether the
250-crore annual savings that the ministry claims will be achieved through the change will actually materialise.

KARMIC CONSEQUENCES

‘Good deeds beget good; and evil brings evil’—this, in a nutshell, is what I believe to be the basic understanding of
karma
. The lack of concern displayed by Air India employees for customers over the years, particularly when passengers were at the mercy of the airline in the monopoly era, has come back to haunt the airline. I recall a phase in the airline’s history when crew members and other staff would inordinately delay flights if the management did not give in to their demands, even when it meant inconveniencing passengers and damaging the airline’s reputation. The fact that the airline has lost its passengers and is now reduced to a state of disrepair seems to be the direct result of such actions.

There was a time when Air India was deemed one of the best airlines and the best organisation to work for. Its employees were held in high esteem; everyone jostled to be part of the organisation, if given an opportunity. Being an Air Indian improved the matrimonial prospects of an employee or their children as the case may have been. It brought perks such as flying to exotic locations, flying down to attend family functions when air travel was not such a common phenomenon, funding children’s higher studies abroad and, for some, a foreign posting. In a matter of decades, however, the scenario has changed dramatically. Air Indians are no longer envied; they are no longer amongst the better paid; they don’t receive their salaries on time; banks are loathe to lend them money; and they retire at 58 years of age, earlier than their counterparts in other public-sector organisations. Foreign travel has been cut down. Career paths are not smooth, and promotions are no longer assured. A job at Air India is no longer coveted and those within the airline are increasingly exploring opportunities outside the organisation.

I believe that employees’
karma
has led them to this state. They were irresponsible in the way in which they dealt with the airline’s fliers and are suffering due to delayed payments and curtailed perquisites while facing an uncertain future. Air India, which was once a great global brand, no longer has a loyal set of fliers, and its service is no longer comparable with that of the best airlines in the world. It was not always so. Air India’s history can in fact be divided into three phases: the first phase, beginning from the year of its inception to the early-1970s, when it ruled the skies and was acknowledged as a premier airline; the second phase, commencing from the mid-1970s and running into the beginning of the twenty-first century, when the gradual drift downwards had begun and gathered momentum; and the final phase, continuing into the present, when the airline needs huge financial assistance for survival.

Interestingly, Air Indians can also be classified into three categories— those who helped establish the airline, those who acted as mute spectators while the airline was in a sinking mode, and finally, those who aided and abetted its virtual destruction. Whilst there is no denying the fact that there have been individuals who have been sincere, dedicated and have put in their best efforts for the airline even during the period when the airline was sinking or being totally destroyed, Divine justice seemingly has no mechanism to spare the good and sincere when it comes to a collective retribution for harm done to the airline by others.

I remember an incident from 2008 when I was still with the airline, with less than two years to go till my retirement. I met a former employee at an event organised by the Flight Engineers Employees Welfare Association, where I had been invited as a speaker. He said that a month from then, he would be celebrating the silver jubilee of his retirement. How have the retirement years treated you?—I asked. He was very happy—he told me—with the way the airline had taken care of him. Having been a part of the airline’s glory years, I felt that he had been blessed with the consequences of good
karma
. With my retirement close at hand, I wondered if I would be able to enjoy even half the benefits that he had! I am convinced that employees who were a part of the airline in the 1970s have been unscathed by the harsh times that employees of the later years have had to face. Those who worked in the 1980s and the 1990s have suffered marginally on account of delays in salary revision, payment of arrears and such other ignominies. But those who have recently retired or are due to retire in a few years may not have any retirement benefits at all. Many are already fearing the curtailment of medical and air passage benefits. In a clear case of divine justice, those who once thought themselves to be all-powerful, wreaked havoc on flight schedules and were uncaring about passenger inconvenience are today caught in a trap of their own making.

FAILING TO PERFORM

Air India’s decline has been so dramatic that even Prime Minister Manmohan Singh had to take note of the impending threat to its survival. In an unprecedented move, he referred to its plight in his Independence Day address from the ramparts of the Red Fort on 15 August 2009. He promised to help. But the airline’s performance metrics showed no change, not even after a committee of secretaries was set up to monitor its operations. Even though the airline’s survival was under threat, the company did not step up to the challenge. Why did no one pull the chain on the rising expenses? Why was the leadership team not chosen more carefully? The only visible impact of the airline’s state of crisis was the delayed payment of salaries. Political interference continued. The board of directors failed to evolve a strategy that could steer the airline out of the turbulent skies. And the chairman failed to motivate his team and create an environment more conducive to growth. Even measures such as induction of private-sector stalwarts to the board of directors and the appointment of an expatriate chief operating officer, Gustav Baldauf, did not yield any result because they were half-hearted.

The appointment of Gustav Baldauf at an annual salary of over
3 crore came to naught because he quit within eight months of joining the airline. He did not have the experience to run an airline and why he had been inducted to the top position was a mystery to all of us, but what was stranger still was that having brought him on board, the ministry never gave him the freedom to perform. Air India’s power-packed board, with N. Vaghul, Amit Mitra, Anand Mahindra, Harsh Neotia, Air Chief Marshal F. H. Major and a host of other big names too turned out to be ineffective in stalling the airline’s continued fall.

Mr Jadhav preferred to run the airline from New Delhi with the help of his many advisors, one of whom, V. Srikrishnan, is currently facing scrutiny from the CBI. His handling of senior management personnel, by shuffling them frequently in a whimsical manner and posting officers with no aptitude and experience in key operational areas, and that too on part-time basis, took a heavy toll of the airline, making some of us wonder whether he was working to revive Air India or sabotage its revival. I eventually wrote to the prime minister in May 2011 to draw his attention to all that was going wrong in Air India. My objective was to update him on the condition of the airline ‘so that at a later stage no one in the prime minister’s office can say that the real facts were not brought to your kind notice in time for your intervention’. I wrote that our market share was plummeting and losses rising; the airline was defaulting even on interest payments; and the turnaround plan was a non-starter. I said that the airline had resorted to lowering its fares to lure passengers but that this had impacted its financial viability and that employee morale was at its nadir. The letter titled ‘Is Air India Being Sabotaged?’ pointed out how the airline was being mismanaged: passengers were being neglected with part-time and inexperienced people heading customer-service functions; the HR department was left to weak and ineffective managers; and there was an overall lack of accountability in the organisation (see
Appendix 12
).

An undersecretary from the civil aviation ministry called me a fortnight after I had sent off the letter and asked me what he should do with it. ‘Do what you do with other letters referred to the ministry by the PMO,’ I replied. As the undersecretary knew me well, he said, ‘Mr Bhargava, there is no point in sending it to Air India because Mr Jadhav does not reply to letters from the ministry.’ I told him to do what he thought was best.