The Descent of Air India (17 page)

Another area of concern that had been ignored by the airline’s senior management for the maximum time was our failure to present a good cabin ambience. Passengers would complain about seats not reclining, seat arm entertainment monitors not functioning, and such other issues that affected their overall flying experience. The Engineering Department, which should have worked on these issues, did virtually nothing. Several heads of the Engineering Department had openly said in the past that their job was essentially to keep the aircraft airworthy, and that aircraft interiors were not their priority. The airline seemed content to let things carry on in the belief that the low fares offered by the airline would keep attracting passengers, despite the poor ambience and on-board amenities and the lack-lustre service on the aircraft.

The induction of new aircraft provided a golden opportunity to tackle the problem. I wrote a letter to Mr Thulasidas saying that we should appoint a dedicated aircraft maintenance engineer as the aircraft manager for each aircraft. The manager would be responsible for ensuring the functionality of all passenger-related amenities on-board and for keeping the aircraft in good and presentable shape. I suggested that we should appoint our engineers, who had the requisite aptitude and motivation, for a minimum period of two years as managers and that an interdepartmental committee should be set up to oversee their operations. Aircraft managers were duly appointed for the first dozen or so aircraft. But as was the case with any initiative that was not directly sought or backed by politicians, this one was treated half-heartedly and abandoned at the first opportunity. I recently asked the executive director of the Engineering Department whether the practice of appointing a dedicated manager had paid off. He replied that the airline had done away with the aircraft manager’s functions as some of the B777 aircraft were now being stationed in Delhi. Since the managers worked in Mumbai, the system had become impractical. This is an example of how the airline has thwarted every decision that could have helped improve both its image and revenues and usher in accountability.

It is also common knowledge that the staff dealing with passengers at airports and on-board the flights have been failing to deliver the standard of service which other airlines routinely deliver. As airport staff and cabin crew are at the cutting edge of the business, we decided to hand-pick a few employees and train and deploy them for the new non-stop flights to enable passengers to experience an upgraded service that was distinct from what they had, in recent years, got accustomed to. With the support of the concerned departments, we succeeded in shortlisting a young, vibrant and experienced team of 32 employees at the Mumbai airport, who were then given a special round of training. Likewise, 25 of the best commercial assistants—baggage handlers and wheel chair attendants—were selected. For on-board services, young cabin crew with the right aptitude were shortlisted and made to undergo a refresher course in service etiquette. The result was heartening, and in the months following the launch of the non-stop service on 1 August 2007, several accolades came Air India’s way. Passengers, including senior executives and industrialists like Ratan Tata, Anand Mahindra, S. Ramadorai (of Tata Consultancy Services Ltd) and Anil Ambani, to name a few, were unanimous in appreciating the high quality of the product that matched the best in the industry. But, as had happened many a time in the past, we failed to retain the momentum. The airport experience was not consistent in quality and the cabin crew on non-stop flights lost their exclusivity as the management buckled under pressure from the concerned union and allowed all crew members to operate these flights.

If the revenues are lower and the load in first class is a dismal 12 per cent, for the year 2009–10 as per the CAG report in 2011 and continues to be so even six years after the induction of new aircraft in spite of committed government business (ministers, members of parliament and bureaucrats travelling at government expense have to necessarily fly Air India), and if Air India’s market share and yield, which is measured in terms of rupees earned per kilometre flown per passenger, has seen a perceptible decline in these years, the blame must be apportioned equally between the employees and the unions. If senior management personnel have been guilty, the middle and lower sections of employees are at fault too for not delivering their best at all customer interface points. Even though employees of Air India have sought to blame the political leadership for their woes, it would do well for everyone to introspect and consider whether some of the blame lies at their own door. There was never any direct order from the political or bureaucratic leadership to deliver substandard service to passengers. The marketing team was never under pressure to go slow on its efforts to woo customers. The aircraft engineers and technicians were never directed to not maintain aircraft ambience meticulously. The failure on these counts has been entirely due to the employees.

Deeply distressed at the pathetic fate of Air India when we were denied our salaries on time in 2009, I wrote to Mr Thulasidas while still employed with the airline, asking why he had gone back on his assurances. Why—I asked—did he hold me back when I had decided to take voluntary retirement? I questioned him on his silence regarding his self-declared intention of taking Air India into the league of the top airlines. I asked him if he would like to share the reasons for this change and specify as to when he gave up on the objective of making Air India one of the top five airlines in Asia. And I sought an explanation for reneging on the commitment made to the Ministry of Civil Aviation that the wage agreements would not impose additional financial liability on the organisation (see
Appendix 8
). But there was no reply and I was left to draw my own conclusions about his behaviour.

The hope that had been generated by a handful of people in 2003, soon evaporated. Air India had frittered away the opportunity to create a disciplined and efficient workforce and a product that its fliers would have been proud to patronise. The changes that had been initiated to steer the airline away from disaster were either overturned or buried under a pile of obscure bureaucratese. It was disappointing because unlike what we read about in the books or see in the movies, the system had been allowed to get the better of the change makers.

CHAPTER SEVEN

a tale of lost opportunities

ON THE EVENING of 30 September 2003, I was presented with a
fait accompli
. Sunil Arora, then holding concurrent charge as the managing director of Air India and the Indian Airlines, called me up from New Delhi to say that I had been appointed as the head of the HR department, effective the following day. It came as a surprise because I had not been a part of the HR department in the past and also because as the head of the In-flight Services Department, I had often been in the line of fire of the airline’s wayward trade unions for my attempts to bring about greater efficiency and cost efficacy in the airline’s operations. Besides, in the past, I had often appeared in the media denouncing the strikes and agitations, which I said were crippling Air India. I had been taking up cudgels on behalf of the management, but the perception was that I was anti-union. Given that heading the HR department would bring me back to direct interaction with the union representatives, the decision was a bold one, and it caught me unawares. But Mr Arora was known for his unconventional methods, and while another man in his position may have preferred to keep me out to avoid controversy and friction, he was more concerned with performance and commitment. I had led the In-flight Services Department with over 2,500 employees and managed to hold my own against the strong-arm tactics of the union representatives, which may have prompted Mr Arora’s decision. I thanked him for reposing faith in me and, frankly, was glad for the chance this would give me to tackle some of the problems that Air India faced on account of a weak and ineffective HR department.

NO TIME TO LOSE

The year 2003 was a critical one for reasons that bear emphasising. Air India was under attack from several fronts and unless the management took stock of the problems and realigned itself to the changing environment—both political and commercial—the airline’s survival was at stake. Here are a few challenges that Air India faced during this time:

•  Competition was on the rise, with the government liberally allowing foreign carriers to expand operations in India. Air India was, as a consequence, losing market share, and its load factor (i.e., the number of seats filled on a flight) was dipping. According to the airline’s annual reports, load factor had dropped from 73.1 per cent in 2000–01 to 71.6 per cent in 2002–03 and to 70.5 per cent in 2003–04.

•  The policy on bilateral agreements was changing. Previously, bilateral agreements between India and other countries had meant that Air India, as the solitary global airline from India, had reaped the bonanza that accrued by way of cash or free or discounted seats on foreign airlines that were offered by the airlines. This income had amounted to about
400 crore annually but was under threat as the government had decided to alter the policy on bilateral agreements. The airline’s operational profit in recent years had been less than the income from such arrangements, and its absence was sure to plunge the airline into losses. The management thus could not afford to ignore the impending blow to its finances once income from this source was discontinued.

•  The management was actively considering the purchase of 28 aircraft and the compelling need was to improve revenues and save on unwarranted expenditure to meet the expected increase in interest burden.

It was not only imperative to set the systemic weaknesses right but also time to focus on productivity, network expansion and work ethic. It was against this backdrop that I was taking over as the head of the HR department. I was aware of the challenges and also familiar with the inherent shortcomings of the department.

Unlike many of my predecessors, I was not blind to the need for change and knew that most HR heads had spent their time carrying out routine duties rather than setting systemic shortcomings right. Many had also bartered away the airline’s future by giving in to the unions’ demands in return for personal gain. All of this had affected the quality of the airline’s performance, and now thanks to Mr Arora, I believed that I had a chance to bring about the changes that were long overdue.

I was keen to align the airline’s work practices with the industry norms and brought about a few changes to achieve that end. Soon after taking over, I drew up a new compensation package for new cabin crew recruits and reworked the ratio of air hostesses to pursers in the crew. Earlier, the airline had had a female-to-male ratio of 50:50 for its crew members, while other airlines followed a ratio of 70:30, which we switched over to. Anticipating the need for more pilots, given the aircraft acquisition plan, I obtained management sanction for more frequent induction of trainee pilots—every three months—and initiated steps to hire expatriate pilots for the first time in Air India’s history. A corporate cadre scheme for graduates from the IIMs was put in place and the subsidiary company Air India Airport Transport Services Ltd (AIATSL) was operationalised. These measures were meant to boost the airline’s performance through enhanced revenues and cost rationalisation.

I was keen to move fast on these changes because they were long overdue, could be implemented without delay and would also bring about a quick improvement in the airline’s performance. It helped that with Mr Arora at the helm, decision making was swift.

There was a need to focus on measures that would bring about the maximum impact in the minimum time. Besides, since I had made up my mind to avail of the voluntary retirement option being offered by the airline, I believed that my time with the airline was limited; speed was the need of the hour. However, as mentioned earlier, Mr Thulasidas persuaded me to withdraw my voluntary retirement application and soon thereafter my focus shifted to introducing long-term corrective measures for the airline’s HR function.

THE SEASON FOR AGREEMENTS

The airline was set to sign a wage agreement with its employees in 2004–05. The agreement was overdue as the previous one had expired on 31 December 1996, and it had assumed great significance as the aviation sector was in the throes of an overhaul. Air India was no longer operating in a near-monopolistic market, and revenues were under pressure from international airlines that were fast expanding their services to and from India both in terms of the frequency of flights and the number of cities covered. Additionally, a lucrative source of income in the form of revenue from ground handling services was about to dip significantly as the government was set to end Air India’s monopoly over these services. If Air India had been able to make only modest profits earlier under a more favourable business environment, it did not need an expert to predict that the airline was headed towards a catastrophe unless it brought about a dramatic change in operational costs and efficiencies.