The Descent of Air India (49 page)

I am more and more convinced that we shall never create the right atmosphere and climate or minimise mistrust or resentment, until we learn to deal in a human way with individual staff members as distinct from unions.’

APPENDIX
5

(A letter from Jitender Bhargava to M. P. Mascarenhas, Managing Director, dated 14 October 1997)

Subject: Refining the system for better decision making

The criticism of the time-bound promotion policy by all Departmental Heads in the meeting held on October 8, 1997 has many lessons for us to learn in the art of decision making, if we sincerely wish to avoid a repetition of what we have gone through on more than one occasion in the recent past, with devastating consequences. Notwithstanding the fact that in the meeting of Departmental heads held on 16 February 1996, when the new promotion policy paper was first introduced for discussions and I was the sole Departmental head to have strongly criticised the concept and modalities and all other departmental heads had maintained a stoic silence thus giving tacit support, it was heartening to see everyone express their views freely this time. This is a major change that we are witnessing and we would like to suggest that free and frank participation in meetings must be encouraged for better and flawless decisions in future. In our considered opinion, a policy should be laid down clearly stipulating that all major decisions which have long term repercussions, impose substantial financial liabilities and are irreversible in character should be first discussed threadbare in the Departmental Heads meetings and only then be presented to the Board for approval. Comments, particularly critical ones, of the departmental heads should be enclosed with papers presented to the Board members so that they are aware of various apprehensions and points expressed by the Departmental Heads before taking a decision. This will lend greater transparency to the process of decision making. This is considered all the more important as the Board, in its present form, has only the managing director as a representative of the Company and Board members are generally bereft of various long term effects of the issues on which they are taking decisions. Some of the policy/issues of recent years which can be dubbed as not having been taken in Company’s interests are—corporate identity change; agreement with IPG, promotion policy, etc. All these plans and decisions can be identified as having been philosophies and plans of individuals occupying the Chair of Managing Director. The draft policy should also provide for a redressal system so that no departmental head has any fear of being penalized for airing views, which though not to the liking of the incumbent managing director, may be in the Company’s interests. If this redressal system had been in vogue, we may perhaps have had more than one individual expressing view on the promotion policy and the organization could have possibly been spared the need for reviewing a policy which almost all departmental heads have now termed as ill-conceived and having grave consequences for the airline in the long run. The policy, once drafted, should be approved by the Board so that no individual, even if he happens to be the MD, can tamper with the system and take decisions which are not necessarily in Company’s interest. In the aftermath of what we have unfortunately gone through, we firmly believe that emphasis should be laid on development of systems which usher in professionalism and at the same time make it difficult, if not impossible, for an individual to treat the organization as his personal fiefdom. Introduction of new systems, based on the above, will besides improving the quality of our decisions, also broaden the horizons of departmental heads wishing to occupy senior positions in the future. Moreover, many departmental heads presently believe that the agenda for meetings of Departmental heads should not only be circulated in advance with all connected papers for them to peruse before coming to the meetings but also include all majors issues that confront the company from time to time.

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(A letter from V. Thulasidas, Chairman, to employees of Air India, published in Magic Carpet, February–March 2005)

Subject: Let’s prepare for new challenges ahead

Dear Colleagues,

I am sure all of you are aware of the Central government’s decision to allow domestic airlines—Jet Airways and Sahara—to fly abroad. This decision of the government, coupled with that of phasing out commercial agreements, will impact Air India in two ways. While on one side we will have greater competition, on the other side we stand to lose almost
400 crore of income per annum that accrues to us on account of commercial agreements we have with various international airlines. There is no denying the fact that Air India has, for several decades, been operating in a highly competitive market and therefore, the entry of these two airlines should not pose any significant challenge to us. This trend of thinking is, however, fraught with danger. The reality is that the new phase of competition will be very, very different. Our USP of being the only Indian carrier and therefore the natural choice of very many Indian nationals in India and abroad and of foreigners wanting to have a feel of Indian hospitality while travelling to India will no longer be exclusive to us. Jet Airways and Air Sahara will offer all that we give viz. And Indian ambience on aircraft, Indian cabin crew, Indian food, etc. Besides the fact that they are also airlines of India. We have, for years, enjoyed cost advantage vis~a~vis international carriers. These domestic carriers will now enjoy a distinct edge over us in terms of costs due to their operating on a lower cost platform. In anticipation of the gradual liberalisation of India’s civil aviation policy, Air India in recent years has expanded its network by taking aircraft on dry lease. The induction of a sizeable number of aircraft has been possible largely due to the cooperation of the employees. We are in the aircraft market even today to lease a few more aircraft to further expand our business, so that by the time these new players enter the fray, we have a greater hold of the market on various routes. We have concurrently initiated steps to upgrade our product. The expansion and upgradation of the product will cost the Company several hundred crores of rupees at a time when the income that was accruing to Air India on account of commercial agreements would be getting phased out. This income, incidentally, has been subsidising our operating losses over the years. Controlling of operational costs would thus be a greater challenge before us, because if losses mount beyond our control, we would be compelled to curtail our services, as was done in 1997–98, when we withdrew from several international destinations. However, this time, other Indian carriers will be waiting in the wings to fill in the void.

We have all been accustomed to a certain work culture over the years. The two new private airlines enjoy vastly advantageous working conditions and greater flexibility in decision making, giving them a clear advantage over us. There is, therefore, an urgent need for all of us to enhance our product quality to enhance revenue earnings and manpower productivity so that the cost disadvantage that we suffer is neutralised to the extent possible. I would welcome suggestions from all sections of the employees on areas that can be identified for effecting savings in costs and improving productivity.

While there have undoubtedly been efforts in the past to restructure our cost platform, I must state in all sincerity that the need this time is far greater than ever before. It would not be an exaggeration to state that our ability to survive in the new environment would largely depend on the extent of savings that we can generate and enhancement in revenue earnings. The latter is feasible only if we can significantly upgrade our product to meet our passengers’ expectations. As a passenger will now enjoy numerous options for his travel, we will be able to retain our existing passengers, regain the ones that we may have lost in the past, and attract new passengers only if we can be competitively superior. It is therefore imperative that we put our best foot forward and provide service that matches the very best in the industry.

Every one of you, my fellow Air Indians, can make a difference in the way we do our work. As Air India has a glorious past, with demonstrative ability to overcome challenges through enormous collective experience, I am confident that we will rise to the occasion once again to successfully counter the new threat arising out of enhanced competition, the inherent constraints notwithstanding.

APPENDIX
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(A letter from Jitender Bhargava to the heads of departments in Air India, dated 28 September 2006)

Subject: Monitoring for smooth induction of new aircraft

1.  This is further to CMD’s letter No. HQ/81-3/2280 dated 23
^rd
August 2006 identifying areas in various departments that need to be monitored for smooth induction of new aircraft in Air India and Air India Express.

2.  As there are only a few weeks left before the first of the 18 737-800s is delivered, and just about 5 months remaining for the arrival of the first B777 aircraft (the actual delivery, however, got significantly delayed), action on various aircraft induction-related activities needs to get into the final phase at the earliest.

3.  In view of the large number of aircraft being inducted in quick succession, accomplishment of all preparatory work much before the arrival of the aircraft as per delivery schedule is imperative. This would be particularly true for activities which can either hamper smooth induction of aircraft (non/under utilisation), or have a bearing on service to passengers. Close monitoring of all activities on a regular basis will thus be essential.

4.  To avoid a situation of our witnessing failure on any count, in any department, it would be imperative for each department to formulate a detailed time-bound plan, at micro level, for each of the aircraft induction-related activities.

5.  Attached is a format in which we would like various activities to be listed with relevant details, so that any slippage in implementing any activity can be observed in advance, and necessary action initiated for rectifying the same. To begin with, the plan could include specific and detailed information regarding activities for the induction of the first of the six B737-800s and six B777s. Rolling plans, which can be updated on a monthly basis and fine tuned as date of their induction gets closer, may be prepared with regard to the induction of the next batch of six aircraft of each type. This would enable us to effectively monitor various activities for smooth induction of aircraft.

A copy of the plan may kindly be sent to us latest by October 10, 2006.

APPENDIX
8

(A letter from Jitender Bhargava to V. Thulasidas, Chairman, dated 21 August 2009)

Dear Shri Thulasidas

I hope this letter finds you in the best of spirits and health.

Your participation in various television programmes does give an impression that you have been following the developments in Air India closely, which is only to be expected considering that you were part of Air India not very long ago. I am sure you would be as agonized as we are with these developments.

I am personally a little more peeved and upset than most others because I could see it coming. I am enclosing a scanned copy of your signed message to employees, which I had drafted, and was published in Magic Carpet, February-March 2005, in which the need to reduce the cost platform, improve work culture, etc. was emphasized.

With my retirement only a few months away, I am bound to be asked by people outside the organization as to how could Air India sink to such depths even with me around considering that I enjoy a public profile of being a competent officer.

I would therefore be extremely grateful if you could offer your views on the following:

When you joined the organization in December 2003, you had my VRS application transferred to you by your predecessor. When you asked me as to why I had submitted my application for VRS, I had explained to you that Air India had been gradually sliding down over the years and that I did not foresee a future for Air India because the prevalent work culture would never allow Air India to offer a good product in a competitive environment. I had also singled out our inability to deal with the Unions in changing work practices, which was imperative for bringing about any possible change in Air India’s fortunes. You had, after giving me a patient hearing, then assured me that with you at the helm things would change and that you would do everything possible to bring about change in work culture. On the assurance held out by you, I did not pursue my VRS application.

As subsequent developments were contrary to your earlier affirmations and the industrial relations climate was allowed to deteriorate to such an extent that unions got what they wanted and the management was seen failing to even get crew hotels changed in company’s interest, I am naturally interested in knowing as to what were the factors that could have possibly led to your changing of plans for revitalizing Air India, and when? Many of AI’s current problems can be traced back to lack of corrective action, when it was needed most?