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Divided in merger
Global network of loss
Ground Zero |
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Vertical split in cadre, pay issues remain
TOUCHSTONES IRA PANDE I often wonder what the Olympics were like before television invented them as ‘the greatest show on earth’. I know of sports enthusiasts who have sat holding their drooping eyelids open to watch live telecasts at 2am (IST) and wondered whether they were mad or I was for not being emotionally involved at all.
On record
Dr Ullas Karanth
PROFILE: Prof Ashoke Sen
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Air India and Indian Airlines merged in 2007 to form what has also been named Air India, but their respective cadres refuse to fly as one till date. Politicians and bureaucrats who steered the ill-conceived merger over the years also pulled all the wrong levers, sending the new and overstaffed entity into a tailspin of losses and unwarranted expenses Vibha Sharma
In August 2011 when the government gave Rohit Nandan, a joint secretary in the Civil Aviation Ministry, charge of the troubled national carrier it was hoped he would bring about peace among the warring factions of staff and lead the ailing Maharaja on the path of financial recovery. A year, a promise of Rs-30,000 infusion of taxpayers’ money and another backbreaking pilots’ strike down the line, the situation in Air India has changed little. Nandan’s only visible achievement at the overstaffed carrier (1:221 aircraft-employee ratio; highest among airlines) is that it may not see another strike in near future, given the way the management, backed by the government, held its ground against the blackmail tactics of pilots of the erstwhile Air India during the last strike. The eagerly-awaited Dharmadhikari report is also out, but how far it will manage to span the gulf of discontent between employees of National Aviation Company of India Limited’s (NACIL’s) two arms — Air India and Indian Airlines — remains debatable. The pilots’ strike over who gets to fly Boeing 787s was just the tip of the iceberg of resentment running deep among the cadres over differences in pay, promotion and perks ever since the two national airlines were merged in 2007. The doomed merger Regarding the Air India-Indian Airlines merger, Civil Aviation Minister Ajit Singh admits: “Obviously, the merger did not go as planned. My job is to see what the current situation is, learn from the mistakes and work for success”. So will the Maharaja still be around 10 years down the line? Implemented properly, the merger would have facilitated Air India’s joining Star Alliance, adding to business. The question now is how far pride, nationalism and government’s largesse can carry the disgruntled lot at NACIL in this era of cut-throat completion. The situation is so bad that the two partners are not even on talking terms. Staff of the duo — one predominantly domestic with some international flights and the other completely international with no domestic network — continue to behave as separate entities. The government denies any chance of privatising the national airline, but experts say disinvestment or complete sale may be the only way out. Money spinner to black hole The sad story has been penned by the joint effort of politicians, bureaucrats and employees. Irresponsible decisions by those with no domain experience, magnified by reckless employees turned profitable Air India and Indian Airlines into a combined loss-making entity. Politicians and bureaucrats handed over lucrative routes to private players, while especially pilots and engineers played into the hands of rival carriers by not bearing their primary responsibility, i.e., flying the passengers. Every time the employees decided to strike, rival private airlines benefited. Coming at the peak of tourist season, the daily cost of the recent Air India pilots’ strike averaged around Rs 10 crore. The loss in terms of passenger confidence is separate. While former Civil Aviation Minister Praful Patel was not named directly, but the effect of decisions during his tenure was highlighted by the Parliamentary Committee on Public Undertakings as well as the CAG. He was in charge of the ministry when the merger was engineered. Meant to treat employees of the two airlines on a par, the merger led to financial, administrative and operational problems, issues that were not foreseen by its executors. The national auditor CAG was particularly critical of Accenture, the consultant asked to prepare the merger plan, for not working out the financial implications. The envisaged advantages from pooling of resources, common marketing and sales, and asset sharing remained only on paper. Subversive nexus The Parliamentary panel termed the merger a decision taken in haste. One of its major recommendations was conversion of NACIL into a holding company with NACIL-A and NACIL-I as “separate functional units”. What was disturbing was that the panel hinted of a nexus that surrendered lucrative routes to favour private operators. Indian Airlines was denied a level playing field and forced to operate a network in which 70 per cent routes were loss making. Air India was made to withdraw services from “lucrative and profit earning routes” in the name of “route rationalisation”. Private operators immediately introduced flights on those sectors. The House panel noted that benefits were allowed to various foreign airlines against Air India’s “earnest plea” for checking their unrestricted entry. The CAG report called the administrative decision to buy 111 expensive aircraft when Air India’s market share was on the decline “a recipe for disaster”. The acquisition through debt contributed to a massive debt liability.
Learn from Japan Airlines
International Air Transport Association (IATA) chief Tony Tyler advises Air India should take inspiration from the experience of Japan Airlines (JAL), and resolve its problems through hard measures like route and staff rationalisation and return the market to “normal commercial principals as quickly as possible”. JAL merged with its domestic partner Japan Air System in 2002, and Air India with Indian Airlines, starting in 2007. The 2008 fuel price spike, global financial crisis and subsequent recession hit both carriers. JAL filed for bankruptcy in January 2010, and the Japanese government led a restructuring effort with an investment of over $3 billion. Despite Japan’s consensus-based culture that hinders difficult decisions, deep cuts were made — some 50 routes and 16,000 jobs, just short of a third of the workforce. With this bitter medicine and other measures, JAL emerged from bankruptcy. It posted a $2.5 billion profit in 2011. |
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Global network of loss The scale of the financial mess in Air India is unprecedented. It has a debt of Rs 43,000 crore and accumulated losses of Rs 20,000 crore. According to a study conducted by aviation advisory and consultancy practice Capa India, headed by Kapil Kaul, Air India continues to lurch from one crisis to another. It suffers from low productivity, high costs, poor staff morale, significant unresolved human resource issues, and an unviable business model. Air India’s domestic market share declined from 17.1 per cent in FY2011 to 16.5 per cent in FY2012. International market share also fell from 19.5 per cent in FY2011 to 18.6 per cent in FY2012. The study notes that network restructuring has had a positive impact but the international routes are heavily loss-making. Network restructuring to enhance connecting hub opportunities — especially at Delhi Terminal T3 — has resulted in an almost 10 per cent increase in traffic. Parallel operations of Air India and the erstwhile Indian Airlines have also been eliminated, resulting in improved efficiency. Several loss-making routes have been suspended. Another 31 routes are under evaluation. A government committee established to review the route network found the carrier lost Rs 1,492 crore on international routes in 2011-12. The airline has suffered losses of Rs 8,000 crore in 2012 alone. These losses could have been higher if it were not for the business increase as a result of the difficulties faced by Kingfisher. The financial restructuring plan was approved by the Cabinet in April 2012, which will see an infusion of Rs 30,000 crore till 2021. Funds raised are also to be used to repay the high-interest working capital loans. According to the Capa study, August 2012 onwards the carrier is expected to replace Boeing 777s with 787s on European routes, such as London, Frankfurt and Paris. A new triangular route from Delhi to Melbourne and Sydney is also planned from September 2012. While a stock market listing is envisaged, an IPO is not possible before 2020, as the Securities and Exchange Board of India requires a three-year track record of consistent profit making. Voluntary retirement In a bid to right-size the airline, a Voluntary Retirement Scheme (VRS) has also been proposed, of which an Employees Stock Option Plan would be a sizable component. As many as 7,000 employees are eligible for retirement over the next five years. The government is also seeking to implement recommendations of the Dharmadhikari report for manpower integration. It is could reduce wage costs by Rs 250 crore in one year. |
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Ground Zero
The Valley till then was a favourite spot for shooting romantic movie scenes, immortalised by Shammi Kapoor crooning “Yeh chand sa roshan
chehra” to Sharmila Tagore aboard a shikara in the 1960s block-buster “Kashmir Ki Kali”.
Sridevi, who had just acted in the super-hit “Mr India”, was shooting for a film which had Anil Kapoor as her co-star. I remember interviewing her by the banks of the Dal Lake while watching shikaras lazily wend their way over the placid waters. It was an idyllic setting that would be by the early ’90s totally shattered. As violence and strife engulfed Kashmir for the next decade, the only shooting that was done was by militants and the forces exchanging fire in Srinagar and other parts of the Valley. As terrorists targeted even tourists, the Dal Lake wore a deserted look, as did the famous hill stations that the Valley boasted of. Srinagar became a fortress with security bunkers and barbed-wire fences becoming ubiquitous. Today, however, there is a sea change. I was in Srinagar last week for the launch of Kashmir Tribune and could see a return to normalcy that reminded me of my first visit to the Valley 25 years ago. It is now traffic lights that stop vehicles and not gun-toting policemen. Stray dogs are in fact a far greater menace in the city, as it is in
Chandigarh. There is a yearning for peace that has seen tourists flock back to the state and hotels fully booked. By last count, it had crossed a million. If 2010 was the year of the
stone-pelters which let loose a reign of anarchy in the state, 2011 brought the backpackers in droves as the local populace, tired of recurring violence, enforced a healing calm. Despite provocative incidents, the peace has held for much of 2012 that has so far seen a boom tourist season. Everywhere the signs of the resurgence are evident. It is now obvious that people in the state of Jammu and Kashmir want to move forward rather than backward and seek a sustainable peace. The young are hungry for more information on what is happening around them. They also want to make career choices that will allow them to match their abilities with their aspirations. That has seen IAS coaching centres sprouting everywhere. Chief Minister Omar Abdullah while welcoming the normalcy is aware of the risks. When he took over the reins of government in 2009, Omar Abdullah was the youngest Chief Minister of the country. The three years or so at the helm of affairs has seen Omar turn wiser and more adept at statecraft, outwitting his critics and, if I may say so, out ‘tweeting’ them too. Omar told me perceptively in a recent interview: “I am now acutely aware of how quickly things can go from really good to really bad.” He added: “In Jammu and Kashmir you take your eyes off the ball at your own risk.” There is much that needs to be done for India's frontier state, including providing employment for the aspiring young. It desperately needs infrastructure and industry to develop and prosper. Successive governments have promised plenty but delivered little. The pace of reform and change has to be considerably speeded up. There are, however, encouraging signs that the state of Jammu and Kashmir is on the cusp of a major transformation. An exciting future is opening out for the state and there appears to be a great movement forward. Indeed, there is a new dawn visible on the horizon. All this is largely because the people of Jammu and Kashmir are no more willing to be locked in the past. As they look ahead, they are eager to cash in on the dividends of peace. The situation remains fragile and, as Omar pointed out, could alter rapidly. The Indian state must be alert and not let them down. Send your comments to
raj@tribunemail.com |
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Vertical split in cadre, pay issues remain
There is a fine distinction between policy making and running an airline. But that has blurred in the case of Air India, leading to the present state of affairs. Constant interference from the policy-makers sitting in Rajiv Gandhi Bhawan — coupled with the thoughtless merger — has created a mess that has brought the carrier to near shutdown. The merger pushed the profit making Indian Airlines into the ranks of loss-making Air India, with employees of the latter not willing to accept those from the former. The morale of the airline staff was down as for months they had not been paid salaries, and for years there had been no revision of pay scales. In 1999, when the pay commission made its recommendations, it had said that the revised scales would be implemented in only profit-making public sector undertakings (PSUs). As such, revised scales were given to Airport Authority of India employees, but not to those of Indian Airlines or Air India. Despite the merger almost six years ago, present-day Air India continues to be run as two separate airlines. Coming from the respective erstwhile airlines, there are two sets of Directors handling various affairs separately. Since there is no common cadre, there is no common feeling for the airline. The recent stand of the government on the issue of getting training done on the Boeing 787 Dreamliner seems to be the only tough stand taken in the merger. It was also the trigger for the recent strike and subsequent removal of pilots. “If you have removed the name of one airline (Indian Airlines), then why can’t the pilots from that airline fly on routes like London and New York and the pilots from the other airline fly routes like Chennai and Mumbai?” questioned a former CMD. In the note sent for clearance from the Union Cabinet at the time of the merger, there were clear goals and timelines set to achieve the merger of all staff, including pilots, cabin crew, technicians and engineers. Till date, no cadre has been fully merged. |
TOUCHSTONES IRA PANDE
I
often wonder what the Olympics were like before television invented them as ‘the greatest show on earth’. I know of sports enthusiasts who have sat holding their drooping eyelids open to watch live telecasts at 2am (IST) and wondered whether they were mad or I was for not being emotionally involved at all. Television has an annoying habit of trivialising every event by first creating a hype and then being unable to sustain it. Once the breathless opening telecasts are over and the screen has beamed opinions of every hue to its viewers, we move on to the next exciting news peg and abandon yesterday’s heroes and heroines. As one news item overtakes the other, our attention shifts and we become gradually de-sensitised to human tragedies and national concerns. This is why I much prefer the slow-fuse burn of the novel: stories sit in your head long after you have put the book down and haunt you for a lifetime. I reflected on this as I heard a brilliant conversation between Shehan Karunatilaka and Shashi Tharoor earlier this week. Shehan Karunatilaka is a young Sri Lankan writer whose debut novel “Chinaman: The Legend of Pradeep Mathew” was awarded the DSC Prize of $50,000 at Jaipur this January and later, the Commonwealth Prize as well. As you have probably guessed, I am not a sports freak and cricket moves me not. I was the Chairperson of the international jury for the DSC prize last year, and of the other four, one was an American (and therefore unaware of cricket at all), while the British jury member was, like me an odd Englishman who never watched cricket. Despite the fact that three out of the five members on that jury were cricket-averse readers, “Chinaman” was our unanimous choice and, listening to Karunatilaka speak of it reminded me why we all were convinced that here was a brilliant new South Asian voice. Sri Lanka has produced some great fiction but most writers from there, to my knowledge, have chosen a grand, large canvas to paint on. This means that they have written of post-colonial cultural themes, ethnic strife and sad, tragic lives caught in the crossfire between competing cultural and religious legacies. Karunatilaka, on the other hand, has written this book almost like a detective novel. At the centre is an alcoholic, cricket-mad writer on the trail of a legendary bowler who mysteriously disappeared after a sensational performance. The author has used cricket to bring out all that is great and sick about Sri Lanka: a lush, verdant tropical paradise dragged into a civil war that nearly destroyed it. When its cricket team resurrected the lost self-esteem of this nation, it provided Karunatilaka with the perfect metaphor to explore layers beneath the drunken ravings of a dying man who wants to discover what happened to a bowler who no one has been able to forget. It is not as if cricket is the only subject – although it is at the centre of it – of the book. Beneath its surface is the unstated rivalry of the Tamil and Sinhalese population, corrupt match-fixers and dodgy punters, a British ex-pat accused of paedophilia and a prodigal son. Dense, lyrical and tragic by turns, it is a ‘sixer’ by any standard. Tharoor, himself a cricket buff who can recall every match he has ever seen and its highlights, was an excellent choice to prise Karunatilaka out of his reticence and get him to speak about himself and his work with candour, humour and pride. It was a treat to hear them spar and thrust. A similar evening, although this was a learned lecture, was another memorable occasion. The speaker was Professor Harish Trivedi and the subject Premchand, arguably India’s best-known writer. Trivedi is an acknowledged authority on post-colonial studies and a well-known translator of Premchand. What is most impressive, however, is his complete mastery over two great literary traditions: Hindi and English. Added to this is his academic vocabulary and understanding of the deep cultural bonds and chasms between the two linguistic traditions. In his lecture, which he neatly divided into a Hindi-half and an English-half, Trivedi explored the bi-lingual literary persona of Premchand. In doing so, he raised some searching questions about Hindi and Urdu and of the cultural history of the early twentieth century, when Urdu slowly faded and Hindi became the dominant language of North India. It is not just UP that saw this linguistic division develop into a cultural and, ultimately, a political divide. Punjab saw a similar paradigm in the shift from Urdu to Punjabi (or Hindi). It was his subtle readings from parallel texts written by Premchand that brought graphically alive how linguistic vocabularies actually create political and social mindsets. This thought is worth pondering over and applying once again to what is happening to India at present. How far is homogeneity of language (mainly bad English) erasing all those relationships and bonds that have been the glue that has held us all together down the ages? When I am addressed as ‘Aunty’ by my maid, the vegetable vendor and auto-driver, I am stripped of all the other warm names that would have once been used to address someone of my age. Ma-ji, Mataji or Didi are now seldom heard and often I hear children ask parents, ‘What is a Tauji, mom?’ Worse, we have forgotten how to count in our own language, and if you don’t believe me, ask your child to tell you what eight-eight is in Hindi or Punjabi. I am almost certain, she won’t know. |
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On record
Dr Ullas Karanth You have welcomed the Supreme Court’s order banning tourists from core areas of tiger reserves. Why? A well-planned nature reserve should have areas demarcated as “core”, reserved for protection and research, and zones marked for “tourism”, where visitors may come to see wildlife. Because of legal complications at present and recent political history, many tiger reserves do not have such zoning, which is urgently required. Phasing out tourism from core areas is important, but the issue has been ignored by all. The Supreme Court’s interim order till August 21, when this issue will be again taken up, is a good wake-up call to all concerned. You have said the economic power of tourism should be leveraged to create more habitats outside the existing tiger habitats. What is the concept? Today, reserves where tigers are actually doing well (not all are legally notified tiger reserves) occupy less than 30,000 sq km, or less than 1 per cent of India’s land. This is not enough. But the tourism industry, particularly the high-end variety, is using all its economic and social power only to increase tourism pressure on this 1 per cent. The same money could be employed to create more tiger habitats outside of this 1 per cent, on private land, by sharing the returns with a larger group of farmers. This would also incentivise them to stop growing crops, and earn more from tiger viewing and tourism. But the profit-driven tourism sector will not do this, unless it is squeezed out of the last 1 per cent. Of course, it will need some time for readjustment. I hope the Supreme Court will be wise enough to drive the process rationally. What is the biggest threat to tiger conservation in India? Poaching and human impact on habitats, as well as economic growth around the habitats. India’s tiger population has reportedly gone up to about 1,700 in recent years, from 1,400 in 2007. How did it happen? I do not agree with figures that are not based on the best of science. Government data says habitat has shrunk, but tiger numbers have gone up, implying an increase of tiger density by about 45 per cent in the past five years. It does not make sense to me, and data derived from the best methods is simply not available. As many as 90 per cent of the tigers are in a few major reserves, and we should focus on counting them right there, instead of wasting time and money on all-India estimates. Have the forest departments become more serious? I think so, but the question is have they become more capable, more focused and knowledgeable. I am not sure of that. Have anti-poaching strategies started working? Strategies initiated in the 1970s are what led to tiger’s recovery from the brink of extinction. The point is to keep focusing on what has worked, and not worry too much about the so-called new strategies that are untested. Good reserves like Nagarahole and Kaziranga show how traditional anti-poaching strategies can work. No fancy technology or software is really needed. Is enough being done to stop the use of tiger parts in medicines? Changing consumer attitudes is not easy. Rather than worry about changing 1 billion Chinese, I would focus on patrolling and preventing prey poaching in the 50,000 sq km habitat in India, which is very doable. How does China react to the issue? They have legally banned the use of wild tiger parts in their medicine, but are lax about farmed tigers. The problem is both farmed and wild tigers enter the consumer market. Changing this is not easy through lectures or coercion. Attitude change must happen in that society, which will take time. The tiger-centric conservation policy of India is criticised for ignoring other species. Ornithologists (bird watchers) are particularly upset on this score. This is baseless. Protecting one tiger reserve such as Nagarahole (Karnataka) with 60 tigers protects 300 bird species. This is not something any sensible ornithologist would oppose. For birds not automatically protected in tiger reserves, they should fight to save the habitats of those birds, just as tiger conservationists have done for the past 30 years. In the north-eastern hill states, tigers are almost gone, but there is a huge variety of birds. Smart ornithologists like my former student Umesh Shrinivasan and his colleagues are trying out bird conservation models that |
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PROFILE: Prof Ashoke Sen The billionaire selected the first nine winners of the award this year, including Prof Sen (56). All nine have agreed to be on the selection committee for the future awardees. Prof Sen, for now, does not know what do with the huge sum. “I have no idea what I will do with $3 million,” he said after the award was announced. But he intends using the money for funding children’s education. As a young boy, Sen’s interest in physics was fuelled by the fact that most good students used to opt for it. “Five out of the top 10 students of my batch opted for physics in Presidency College, Kolkata. Since my work is theoretical, financial needs are very little.” Sen is a professor at the Harish Chandra Research Institute in Allahabad and has been awarded for his research in the string theory, which examines how Einstein’s justification of gravity is not in sync with quantum theory. Many scientists refuse to consider string theory as part of science, because it hasn’t come up with experimental predictions as yet. Sen insists that in the near future, it might change the way we perceive the universe. A graduate of IIT Kanpur, Sen went on to study at State Univesity, New York, and then to Fermi National Accelerator Laboratory, near Chicago, and SLAC, Stanford, for post-doctoral work. In 1988, he returned to India and worked at the Tata Institute of Fundamental Research in Mumbai, before joining the Harish Chandra Research Institute. Prof Sen is one of the rare successful scientists who have returned to India. “When I came back in 1995, I did feel a little isolated, but that is no longer the case. The internet has made all possible information accessible, and I have a good academic circle at the Harish institute,” he has been quoted as saying. Prof Sen is optimistic about research in India. “While one expects more scientists and more research, I must add there are several pockets in the country where great research is being done, and which can replicate the success of scientists in other countries.” But he believes there is a need to set up many more institutes to attract more students to science. Prof Sen received the Padma Shri in 2001 and the Shanti Swarup Bhatnagar Prize in 1994. Sen is the elder son of Anil Kumar Sen, a former professor of physics at the Scottish Church College, and Gouri Sen. He is married to Dr Sumathi Rao, also a physicist. |
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