The Maharaja made a mistake!

July 3, 2011 12:00 am Comments

Air India The Maharaja made a mistake!

I was travelling around the time the pilots of Air India were on strike. The situation at many a air ports were grim as Air India flights were not taking off. Pilots from around the country refused to fly planes, however a few days later they called it off and resumed flying. People were intimated not to book tickets and check before they leave for the air port etc. A brand that was so cherished in India was brought down to shambles and faced some wrath from the loyal customer during that hard time for them.

The angst within the company had been budding for a long time, and this year it came to the surface and exploded, making the maharaja bow his head down in shame. They made a mistake a few years ago and they are paying the price now. Industry experts believe that this situation was primarily caused due to the huge losses the company is facing at present. The reason of the losses, a decision made in 2007. In 2007 business intelligence experts advised a merger of Indian Airlines and Air India. The solution was to merge the two and to replace a fleet that was now ageing. Profits of Rs 1000 crore were expected in one year after the merger.

Sadly, that is not how things went. The losses kept mounting up and from Rs 1000 crore to Rs 2000 crore it is now at a whopping figure of Rs 16,000 crore. The reasons for the loss are simply the ability to manage resources in a planned and efficient manner. A new fleet was acquired, but when such expensive aircrafts are bought, training months in advance is necessary. A new system needs to be installed and the employees need to be trained. This did not happen the way it should have, and Air India was in no position to accept all the flights at once because the resources were not prepared to manage it. The three flights lay with Boeing for three months, gathering dust and accumulating losses.

Another bone of contention were the various promises that were made and were not kept. The pilots from Indian Airlines were promised that they too would achieve the same salaries as the pilots of Air India – this was not met with, even after three years of loyal service. The pilots protested time after time bit their questions were not answered. The unrest kept building and now even the pilots in the management cadre have gone on strike in support of all the pilots.

When Jet went on strike, Naresh Goyal came out and requested pilots to start flying and to come back to work. At air India, Jadhav wanted to teach the pilots a lesson they would remember for life. He wanted it to appear as if he was looking for an excuse for his failures that were to come. He wanted to pin point the reason for his losses on to the strikes of the pilots.

It is sad to note that Air India is apparently losing up to Rs 20 crore a day, one may wonder why it is not giving into the demands of a decision that involves only a few crores?

SoIL Team

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Comments

  1. Gourav says:

    Many big companies takeover small companies, they dont necessarily go in loss ! then how come a merger of Indian Airlines with Air India in 2007 be credited as sole reason for the loss ? May be its mismanagement in past few years which led to the loss.

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