Impotent Rajah

Projectile Dysfunction

• Striking pilots demand pay for erstwhile Indian Airlines pilots on par with Air India pilots and a CBI inquiry.
• After the AI-Indian Airlines merger in 2007, AI lost its marketshare and 32 profitable routes to the private carriers.
• AI bears a total debt burden of more than Rs 40,000 crore at present and accumulated losses of over Rs 13,300 crore.

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fter putting hundreds of itineraries off-kilter, the standoff between the Air India management and 800 of its striking pilots had at least entered the stage of negotiations on the ninth day. The breakthrough expected on May 5 didn’t come about; talks were to continue as we went to press. As of May 5, the strike—which virtually grounded the airline and had a spillover effect on ticket prices all around— had caused a daily loss of Rs 26 crore to Air India. Beyond the immediate turbulence, the flashpoint highlighted the larger issue of acute mismanagement and the urgent need for corrective measures to save the bleeding national carrier, which has been running up huge losses.

Since Air India’s merger with Indian Airlines in 2007, the company has been relegated to number four behind private carriers—Kingfisher, Jet Airways and Indigo. After the merger, the combined loss accrued by both airlines more than doubled to over Rs 2,000 crore in the first year and rose to Rs 5,000 crore the following fiscal. This was largely due to the government’s open skies policy, which allowed private carriers to ply abroad. But confident of its projected growth, in 2008, Air India ordered 43 wide-bodied Boeing 777s and 27 Dreamliner 787s along with a few narrow-bodied aircraft—valued at a total of $11 billion. The airline borrowed Rs 22,500 crore to fund its fleet acquisition plan. This has added to its financial burden. Its accumulated loss is Rs 13,300 crore.

Meanwhile, the Delhi High Court on May 3 pulled up both the management and the striking pilots for causing huge losses to the company and putting passengers across the country through serious hardship. The pilots had demanded pay for erstwhile Indian Airlines pilots on par with that of Air India pilots and the removal of Air India CMD Arvind Jhadav on charges of alleged corruption. A CBI inquiry into the mess in the airline was also demanded. Additionally, the pilots also sought a probe into why 32 profitable routes were taken from the airline and given away to private carriers.

Civil aviation minister Vayalar Ravi has admitted the issue of profitable routes needed a serious probe. He claims not to know why his predecessor Praful Patel had sanctioned such a move in the first place. However, he insists all the other issues that the pilots’ union is agitated about are being addressed by the government. An Air India statement said “the pilots and other employees need to engage with the Justice D.M. Dharmadhikari committee, as it provides a very vital platform to resolve all human resource-related issues, including pay parity, rank rationalisation and seniority”.

Of course, the pilots’ demand for a CBI inquiry is tricky territory for the government. Sources say the Congress does not wish to antagonise another alliance partner, the NCP, after the trouble it has had with the 2G scam, involving key ally, the DMK. An investigation into Air India’s functioning after its merger with Indian Airlines would mean raising questions on the role of the NCP’s Patel, who held the aviation portfolio till Ravi took over in January.

In the backdrop of the strike, the Comptroller and Auditor General (CAG) has also questioned Air India’s ongoing acquisition of passenger aircraft and has indicated massive mismanagement on several fronts. The CAG report is expected to be tabled during the next session of Parliament. Turbulent times ahead indeed for the national carrier.