Tuesday, 21 January 2020

Air India On Nosedive

Updated: December 11, 2010 1:21 pm

One of the oldest institutions, which was once the pride of Indians with JRD Tata as its guide represented truly the Maharaja of India, the symbol which still has but without the glory and pride of its past. Sometime even this symbol was removed and changed with something, which thanks to the then aviation minister late Madhav Rao Scindia that it was restored. It has now lost identity. Two organisations of India—Indian Airlines and Air India—have been merged without effecting real merger and the notional common Chairman has only achieved this unification which is to no body’s advantage.

                I was recently traveling and my ticket indicated National Aviation Company of India Limited (NACIL) Indian Airlines Ticket. Inside the flight was mentioned as IC but the announcements made used the name of Air India, Flight. When I entered the apron, I found the plane with old emblem painted on the body of the aircraft. I was told that domestic flights are using four types of old and new emblems on the body of the aircrafts.

                The girl inside the cabin announced that we are welcome to Indian Airlines flight, which she hastily corrected with “Sorry, Air India flight”. When she was passing by I told her of my confusion whether I am traveling Indian Airlines or Air India or NACIL. “We too are confused,” quipped the girl appearing harassed. We have systematically destroyed the identity of the brands, which were assiduously built over the years. It is surest way in marketing to meet disaster.

                Swiss Air is still Swiss Air with same logos of Red Cross. So is British Airways and Singapore or Air France. But our leaders and bureaucrats have experimented with names and logos and colours of the planes to play havoc with the brand. The result is that NACIL Air India has market share of 18 per cent, when a small airline like Indigo with merely 20 aircrafts has 16 per cent of market share and King fisher has 19 per cent. If we consider Jet with Jet life, it has 26 per cent of the share. Air India has lost Rs 14,000 crore in last four fiscals and is under debt burden of Rs 40,000 crore.

                All over the world airlines are cutting cost but Air India hires a second house for its chief at 36 Lakh p.a., when there accommodation is available. It hires sacked or failed executives of other private airline at exorbitant cost. Even a CCO of its subsidiaries is fixed at 3.1 crore p.a.

                When Rajiv Gandhi was the prime minister all the CEO of Air India, Indian Airlines, and Airports were professionals and not bureaucrats. Now all of them are civil servants since long and no one has stake in making or marring his career here. At that time Jagdish Tytler was the minister and all the airlines made profit. Even a losing organisation like International Airports Authority became one of the top ten profit-making public sector companies and I happened to be its chairman. Rajiv Gandhi with his background of aviation ensured that these institutions performed well.

                The merger of airlines was a wrong decision and I had at that time dissented with it. Even later when Airports Authorities were merged, I gave evidence before parliamentary committee that it is not going to be sound as competition is good and with my experience with UN assignment as adviser to Indonesia, I quoted to them how others are multiplying separate units for competition rather than creating monoliths. It is high-time bold decisions are taken at the highest level to undo the damage and build the brand identity. Cost cutting is top priority and the airlines are doing little to achieve the target.

By Prof NK Singh

Writer is former Chairman, International Airports Authority and former Director, Air India

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