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THE CHAT ROOMS
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'Our plans project a faster turnaround'
Bombay, November 22, 2000, 1500 hours IST: A technical snag delayed the Chat with Captain K R Singh, chief of the Indian Pilots' Guild. The Chat started an hour behind schedule and some good questions could not be replied to, but Captain Singh has promised to return and Chat again.
K R Singh (Wed Nov 22, 2000, 2:40 PST)
Good afternoon everyone! Before we start, I'd like to remove certain misconceptions which exist in the public's mind since the annual reports are not in the public domain. First, that Air-India is loss making. AI is today NOT a loss-making company. 1999-2000 operating profits were Rs 76 crores. Second, the taxpayers money is involved. Only a total of Rs 153 crores of the government or taxpayers money has been put into AI, of which Rs 220 crore have been returned and the govt has not put in a single paisa since 1953. So today, whatever the worth of the company is, which is to a turnover of Rs 4700 crores, has been built up entirely by the employees. Thirdly, that the airline is overstaffed. Based on the Kelkar Commission in 1986, AI should have had 50 aircraft. However, we have shrunk to 22.
During this period, due to the shutting down of Vayudoot, a majority of the employees were absorbed into AI besides another 3000 contract labourers were ordered to be absorbed by the Supreme Court. However, with even this employee-to-aircraft ratio, the staff cost is only 22.6 per cent of revenue, which is way below the international norm which vary between 30-32 per cent with United Airlines peaking at 47 per cent.
In the last five years, there has been no industrial unrest at AI. The loss that has been incurred is due to higher management decisions where the unions play no part such as the Caribjet wet lease, change of logo, sale of aircraft, etc, etc. For instance the Caribjet wet lease cost AI over Rs 500 crore with no corresponding revenue.
A commom complaint is shoddy service and delayed flights. This is primarily due to lack of motivation and low morale of the employees, basically because the higher management having allowed the product to degrade, where the first class has been removed in most aircraft, the interiors are not being refurbished at regular intervals, and the age of the AI are old which add to the delays.
We have in place a detailed technical plan, with the help of the top consultants for a turnaround strategy based on the current market scenario. We feel that there are only two things required at this point in time. One, upgrade the product and motivate the employee. The second point has been talked to the unions and they have responded very positively with a pledge of equity stake in the turnaround. The upgrade plans are being formulated with the technical assistance from Airbus and Boeing.
haresh (Wed Nov 22 19100 1:22 PST)
Welcome aboard! Is
it not strange that the pilots who are responsible for destroying AI are now
planning to buy it?
K R Singh (Wed Nov 22, 2000, 2:41 PST)
Haresh: A very harsh statement. However we are just responsible for flying the aeroplanes till now, which we have done better than most international standards. The inconveniences caused to the passengers are beyond our control because of the managerial decisions and the age of the aircraft. Today we agree that the survival of the airline is privatization and since 40 per cent is up for sale for everybody, why not us?
Also, there is no excess staff that needs to be sacked. Please read the earlier post and note that the IPG turnaround plan includes development of 8 new profit centers that will enhance productivity all round and fully utilize all available staff productively.
mary (Wed Nov 22 19100 1:26 PST)
Congratulations on
your brave attempt? But is there not the risk that the financial guys will
ultimately control AI through the pilots?
K R Singh (Wed Nov 22, 2000, 2:41 PST)
Mary: Thanks, and not necessarily true. Because in addition to the financers, the staff are going to put in their money and therefore will have equal stake. As a matter the financers will look to the employees to create value and run the airline.
rani (Wed Nov 22 19100 1:32 PST)
Dear Sir, Why should
AI not be privatized? YOur service is pathetic. YOur staff does not have work
culture. And still you support them?
Rajen (Wed Nov 22 19100 1:42 PST)
hello sir, Why A-I
not be privt.because its all over losses is more and yet not have been achieved
any i'national landmark.and also its salary of staff is twice of any i'national
staff and also they cann't work properly.
K R Singh (Wed Nov 22, 2000, 2:41 PST)
Rani and rajen: We are for privatization and have stated are confident of turning the airline around ourselves.
Rajiv (Wed Nov 22 19100 1:51 PST)
Sir, do you really
think pilots & for that matter the staff of A-I is in a position to run this
airline.
K R Singh (Wed Nov 22, 2000, 2:41 PST)
Rajiv: there is no doubt about it! Because if the employees are putting in their own hard earned money into the airline, what better commitment can one ask for? When the airline was under pilots management (Capt D Bose, Capt D Mathur) AI was doing extremely well. Incidentally, Gulf Air, Kuwait Airways, Malaysia, Singapore Airlines have virtually been set up by ex AI staffer. And a pilot, Mr Rajiv Gandhi, did a fair job of running the country!
Rajen (Wed Nov 22 19100 1:58 PST)
hello sir, r u
there, and also i have a que that the benefit of emp. and also various scheme
for its travel agent is benefit to them only. I think that various scheme is
made for only its travel agent. and also why u cann't cut the excess staff. As
compare with other flight A-I spend more person to only one flight (Mgt side as
well as Eng side also). Because now a day's everyone cout of it's job from the
company.But A-I increase their staff why?
K R Singh (Wed Nov 22, 2000, 2:41 PST)
Rajen: the unions are not responsible for bringing the aircraft down to 22. Because of lack of aircraft, we are missing out in competition. The non-induction of aircraft into the fleet is a result of no decision making by the government during the past 10 years.
Jeevan (Wed Nov 22 19100 1:59 PST)
Dear Sir: What is
the option if we do not privatize A-I?
K R Singh (Wed Nov 22, 2000, 2:41 PST)
Jeevan: if we do not privatize, it will be the end of the airline.
dwipin (Wed Nov 22, 2000, 2:15 PST)
Sir, Do you really
think that employees participation in Air-India would be a solution for the Air
India's amounting losses
K R Singh (Wed Nov 22, 2000, 2:41 PST)
dwipin: We are asking the government to keep us on a level playing
field and take a decision based on our financial and technical plan which
projects a faster turnaround.
flyingwoman (Wed Nov 22, 2000, 2:36 PST)
captain,
if you are running the airlines, who will be flying the planes??
K R Singh (Wed Nov 22, 2000, 2:42 PST)
flyingwoman: The airline will be run by a professional management
team. We will continue to fly the planes and run the airline!
Cockpit Crusader (Wed Nov 22, 2000, 2:18 PST)
You
pilots seem to have just enthusiasm without any proper business model to make
Air-india profitable right? How will raise enormous money to buy new aircraft?
K R Singh (Wed Nov 22, 2000, 2:45 PST)
Cockpit Crusader: A detailed business plan has already been
submitted to the government, which no other competitor has done as yet, keeping
us one step ahead of the competition and the government's requirements.
Hawaii Jahaj (Wed Nov 22, 2000, 2:44 PST)
Don't you
think it is fair to let the Tatas take over Air-India. After all, Air-India
belonged to them until the govt nationalised it. My heart beats for the Tatas
K R Singh (Wed Nov 22, 2000, 2:46 PST)
hawaii jahaj: Today, we are talking about a business proposal
which involves turning around an industry of 18,000 employees. There should be
no emotion involved in this.
K R Singh (Wed Nov 22, 2000, 2:48 PST)
Thanks everyone for the questions. Hopefully we'll meet soon on
the Chat again.
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