The future for Air India, India's national carrier

Discussion in 'Economy & Infrastructure' started by Pintu, Jun 20, 2009.

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Should Air India be privatized??

  1. Yes

    38 vote(s)
    71.7%
  2. No

    11 vote(s)
    20.8%
  3. Not sure

    4 vote(s)
    7.5%
  1. Pintu

    Pintu New Member

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    Air India chief says airline fighting for survival

    Air India chief says airline fighting for survival
    Press Trust of India
    Saturday, June 20, 2009 (Mumbai)



    Crisis-hit Air India
    Chief Arvind Jadhav on Saturday said the delay in paying the staff salary has become necessary as the airline
    is fighting for survival. "This is an hour of crisis. This is a fight for survival.

    The survival of our own airline. Jadhav said in a message to National Aviation Corporation India Limited (NACIL) employees. The aviation industry is going through turbulent times.

    Yet, Air India, unlike many other airlines, has not retrenched or laid-off of staff till date, he said.

    "Air India has only decided to defer salary and PLI for June only by 15 days and requested senior officials to voluntarily forego July salary."

    Jadhav said loans from financial institutions at high interest rates cannot be availed endlessly to meet working capital requirement. "Time has come to face the moment of truth in Air India as well."
    Air India has approached the Government for infusion of funds. But, as we have seen in the US, the help comes with conditions attached, Jadhav said.

    To tide over the difficult situation, airlines globally have taken harsh and unpleasant decisions, Jadhav said, adding, "we should consider ourself fortunate that we have been insulated from the adverse impact of the economic slowdown so far."

    He cautioned employees about the consequences of disinvestment. "We need to be conscious of the impact that disinvestment/privatisation can have on our own lives, should this materialise."

    Reeling under the impact of downturn in global economies and record-breaking aviation turbine fuel prices, airlines the world over have resorted to cutting operating costs and minimising losses.

    According to the International Air Transport Association (IATA), the global aviation industry is expected to lose about nine billion dollars this year.

    The domestic aviation industry, says Centre for Asia Pacific Aviation (CAPA), is likely to incur around 2-billion losses this year.

    Two major domestic air-carriers, Kingfisher Airlines and Jet Airways have reduced jobs, slashed salaries, besides pruning capacity.

    Global airlines such as Singapore Airlines, British Airways, Cathay Pacific, Japan Airlines, American Airlines, Delta, Air France-KLM and Qantas have taken similar measures to lessen the impact of current crisis.

    Pilots of the Singapore Airlines have agreed to one-day compulsory leave every month. Managers and administrative officers are taking one day a month either as unpaid leave or from their annual leave.

    British Airways has frozen pay and cut around 2,500 jobs since last year. It has also sought 4000 voluntary redundancies.

    American Airlines has announced plans would cut upto 1,600 positions by August this year. Japan Airlines wants to cut 1,200 jobs by March 2010.
     
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  3. Pintu

    Pintu New Member

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  4. Pintu

    Pintu New Member

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  5. thakur_ritesh

    thakur_ritesh Administrator Administrator

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    high time the government realised that air india is a white elephant put on steroids all at the expense of tax payers money which at the end of the day is a burden on the country's exchequer more than anything else. all this money put in the dustbin called air india could be used in more productive ways from which in the end the country would benefit. it is time to do away with not only air india but with a whole lot of other PSUs which sustain not because they have good management practices but purely because incompetency is propped up in these organisations all funded by the taxpayers money. make air india the starting point of this disinvestment process and set it out as an example to the industry for the things to follow in the present upa regime. this government has a mandate to tackle issues head on and not look at others for advice to what to do as was the case last time. with the left out this time the ball needs to be rolling and in a democratic setup where elections are due every 5yrs it is generally in the first two years that any government can take the toughest of the decisions and so now is the time to set our priorities right and also undo the wrongs of the past 5yrs and put a sense and meaning to the course that this government is going to follow for the next 5yrs on the economic front.
     
  6. Yusuf

    Yusuf GUARDIAN Administrator

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    Its time the Airlines is divested in. The government doesnt even have the Left hounding it now, so it can take some tough economic decisions. One, it will give the govt a lot of money for its other projects, two, save a lot of jobs if the airlines goes bankrupt.
    Im sure there will be a lot of private players queuing up to buy the airline. Tata's would want back what it once owned. Im sure the Ambanis might get interested as well.
     
  7. ZOOM

    ZOOM Founding Member

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    Air India's downfall begin the moment with the constant interference by Political parties and Government officeldoms in its management affairs to play as a part of hurdle in growing such a public sector undertaking. Even Union especially backed by Commies are creating another hurdle in privatization, since many semi-skilled workers would require to sustain its aftershocks as total workforce of Air India is nearly 31000 which is beyond its usual requirments and operation. At the same time, pressing need is to downsize such huge workforce to minimum of 15000. Even Labour Union is blaiming its Management for all its mismanagement and hence they aren't willing to accept condition to recieve their June salary pretty late rather then lending helping hand to ailing Airways which is fighting for its survival. This is labour unions must take some lessons from British Airways which is more or less in a similar condition and its management has asked its workers to work at free of cost for nearly two month, else get disengage from its operations. Its CEO has also willing not paid for his one month salary to contribute in cost cutting measures.

    At the same time, Air India has also defered the delivery of its purchase of multibillion doller worth 111 Boeing aircrafts becasue of its mounting Debt. But after some time, they do require to take the delivery of the same which is highly a costlier job, since it will create overcapacity to cater to the falling number of passengers.

    In addition to mouting debt, Air-India has to clarify its overdues to AAI, Oil suppliers in addition to leasers of aircraft. Although they have returned back all leased aircraft and taking full services from AAI and also taking Oil supply from suppliers with government backing. But Air India is less fortunate when it comes to spare suppliers for its aircraft based in US, since they first want to clear dues of earlier delivery of spare to accept next quatation of spares.

    On the top of it, merger of Air India with Indian Airlines, which is named as a NACIL was a complete disaster because of its delyed IT intergration and perceived failure to be a part of STAR Alliance of major Airways in the world.

    Only Indian Government can save Air India in such a trying need by divesting some of its stake in it and give major portion and decision making processed to private stakeholders alongwith providing urgent soft loan to keep it afloat.
     
  8. Pintu

    Pintu New Member

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    Air India set to cut wages, stir looms - India Business - Business - The Times of India

    Air India set to cut wages, stir looms
    23 Jun 2009, 0315 hrs IST, TNN

    NEW DELHI: The fate of passengers scheduled to fly Air India July 1 onwards seems as uncertain as that of the airline itself. On Monday, the cash-strapped national carrier announced wage cuts to reduce its annual salary bill of Rs 3,100 crore for more than 31,000 employees by Rs 500 crore. This announcement, intriguingly made hours before a high-level meeting called by a worried PMO to discuss AI's survival strategy, could provoke the unions to dig in their heels.

    Aside from token demonstrations, unions had threatened to go on strike to protest the earlier decision to delay payment
    of salaries until mid-July. "We were earlier told that salaries would be deferred by 15 days. Now the airline has issued a statement that wages will be cut, though we have not been told anything formally. Our protest schedule is drawn up till June 30 and what we are forced to do after that, like going on indefinite strike or something else will be decided in the coming days," said V J Deka, secretary of the Aviation Industry Employees' Guild that represents 7,800 AI employees.

    In the statement announcing wage cuts, AI "reiterated its resolve to maintain its flights as per normal schedule and urged passengers to book for their travel on its flights as usual". However, the airline industry says looming uncertainty could cost AI dear.

    "Since the formation of a stable government, air travel has seen some revival. But AI has got a disproportionately low share of that growth that has gone mainly to private players. If there's even a fear of a strike, their bookings will get seriously affected," said Ankur Bhatia, MD of Bird Group, India's largest airline ticketing IT service provider.

    AI, which has been steadily losing market share apart from Rs 15 crore daily, is seeking a bailout package from the government. On Monday, AI CMD Arvind Jadhav met the PM's principal secretary, T K A Nair, and aviation secretary M M Nambiar and is learnt to have pressed for a government lifeline. The aviation team reportedly spelt out steps such as deferring delivery of some widebody planes this year and cost-cutting measures such as wage cuts. The idea: convince the government to part with taxpayers' money to resuscitate the Maharaja.

    "There was serious discussion. We still have to work out a proposal for the government, possibly a full-fledged Cabinet note, that has the roadmap for AI," said a senior official. Jadhav, under Nambiar's guidance, has worked out a survival strategy that will be shown to aviation minister Praful Patel once he returns from London -- on AI -- on Tuesday.

    Being a public sector enterprise, laying off is not going to be easy for the grossly overstaffed airline that has around 31,500 employees. Arguing for wage cuts, the airline's statement pointed out to employees that it had not resorted to retrenchment or layoff "till date". It has formed a four-member panel to examine wage agreements, including flying allowances and productivity-linked incentives, entered into with the unions. The panel is to submit its report by July 15.
     
  9. Pintu

    Pintu New Member

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    Air India to pay salaries to 11,000 staff on July 3

    BUSINESS LINE
    Air India to pay salaries to 11,000 staff on July 3

    2009-06-30 07:06:15

    [​IMG]

    Air India, which was in the news for delaying payment of June salaries, has now announced that 11,000 employees, of its total workforce of 31,000, will be paid on July 3.

    This move is consequent to the meeting between the management and three unions representing nearly 20,000 employees here on Monday. The airline will now hold another meeting on July 4 to discuss when the balance staffers will get their June salaries.

    Employees who will be paid on July 3 largely comprise the clerical cadre classified under grades 1-9 in the erstwhile Air India and 1, 2, 3 and 6 in (the former) Indian Airlines. The list of 11,000 also includes 600 junior crew members.

    Incidentally, Air India's monthly wage bill is in the region of Rs 350 crore.

    While its top management has been pressing for extra financial support from the Government, the message coming through from the latter is clear in that the airline will have to either shape up or ship out.

    All eyes are on the Budget to see what kind of announcement will be made in terms of some aid to Air India.
     
  10. 1.44

    1.44 Member of The Month SEPTEMBER 2009 Senior Member

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    Air India heading for massive trim; to start low-cost service

    Air India heading for massive trim; to start low-cost service

    Tue, Jul 7 08:25 PM
    New Delhi, July 7 (ANI): Civil Aviation Minister Praful Patel on Tuesday said that a major revamp of Air India's top management would be carried out in 30 days and it would start low-cost domestic operations in a bid to turn around cash-strapped Air India in the next two years.

    According to sources, the entire top management of Air India, which is under a loan liability of Rs 15,000 crore, would be recast in the next 30 days. Several old time directors might be asked to leave and a Professional Chief Operating Officer will be appointed under the Chairman and Managing Director.

    "You will see in the next 30 days a major change in the top management in Air India. You are going to see a major change in the board. Some heads are going to roll. We are going to bring high quality people of great integrity and people with a proven track record in business," said Praful Patel.

    Apart from the massive trim, the airline has also been told to begin domestic low cost flights.

    "AI must enter the domestic low cost segment. That's where the growth is and is something that Jet and Kingfisher have already done. It's upto the airline whether to use AI Express for that purpose or have something else," Praful Patel added.

    The Civil Aviation Minister's remarks follows reports that Air India was expecting an estimated loss of about Rs 5,000 crore in the 2008-09 financial year. (ANI)

    ANI
     
  11. Ray

    Ray The Chairman Defence Professionals Moderator

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    All PSUs are fiefdoms and so they will alwyas be in the red.
     
  12. F-14

    F-14 Global Defence Moderator Senior Member

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    it has been long over due better late than never
     
  13. Daredevil

    Daredevil On Vacation! Administrator

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    Now that UPA govt. doesn't have to piggy back on Communist party morons, I wonder if they will divestment of majority stakes in PSUs for lord's sake. This money generated can be better used for Infrastructure building or closing the widening fiscal deficit.
     
  14. EnlightenedMonk

    EnlightenedMonk Member of The Month JULY 2009 Senior Member

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    Yes, Pranab has set the Fiscal Deficit target to about 5.5% for next year I think... We need good amounts of cash for meeting that target...

    But, somehow I think this is not the best economic environment to be auctioning off stakes in companies, the economy globally isn't doing too good and we may not get the best possible amount of money for selling our stakes in companies... I say we hold on for about an year before we start any auctioning...
     
  15. ZOOM

    ZOOM Founding Member

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    As part of the this trim measure, Air India need to rethink about getting the delivery of 111 all new jets from Boeing and Airbus or rather look to postpone their delivery, since it will only goes on to create excess capacity, at the same time it is costing nearly Rs. 45000 crore.
     
  16. Rage

    Rage DFI TEAM Stars and Ambassadors

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    Future of Air India, India's national carrier

    Air India: To privatize, or not to privatize?

    [​IMG]


    In light of the following developments, is it time to privatize India's national flagship carrier? Think about this in terms of: the benefits of privatization, the disadvantages, the coverage, performance, social reliability, service motives etc. I also want you to think about the time element in this question: should privatization occur now, or in the immediate or distant future? Why? Particularly in light of the fact that Air India is set to join Star Alliance, the world's largest airline alliance in 2010.


    Air India losses more than $1bn

    15:48 GMT, Wednesday, 11 November 2009

    [​IMG]
    The Indian government bailed out
    Air India last month



    Troubled national carrier Air India has reported a net loss of 55.5bn rupees ($1.2bn; £719m) for the full-year to the end of March.

    The loss was due largely to a 12% drop in revenue, from 152.5bn rupees to 134.8bn rupees, as a result of falling passenger numbers.

    Last month, the Indian government agreed to inject 53bn rupees into the carrier to help keep it in business.

    Global airlines are struggling with falling traffic during the downturn.

    The International Air Transport Association (Iata) has forecast losses of $11bn across the whole industry for 2009.

    Air India has been told by the Indian government to cut costs dramatically as a condition of receiving the state aid.

    This could prove difficult, as hundreds of pilots threatened to strike in September to protest against the airline's plans to cut pay incentives.

    The strikes were called off after the government intervened.


    BBC NEWS | Business | Air India losses more than $1bn


    x-x-x-x


    Here, for comparison, are 3 of India's pvt. airline carriers:







    Useful Links: Air India

    Air India - Wikipedia, the free encyclopedia
     
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  17. Daredevil

    Daredevil On Vacation! Administrator

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    I have added a poll to accompany the above question with three options to choose from. It will give an idea of how members feel about the privatization of national carrier Air India.

    I think we should privatize Air India because of their bloated management, inefficient and incompetent staff, poor management policies which are bleeding the carrier and costing the exchequer indirectly. If and when privatization of Air India happens, it should be given to a third company different from Jet Airways and KingFisher to make the airline industry more competitive and in turn give Indian passenger an affordable ride otherwise there will be a strong chance of jacking up of prices by JA and KF.
     
  18. Rage

    Rage DFI TEAM Stars and Ambassadors

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    Excellent! Thank you ddevil.
     
  19. thakur_ritesh

    thakur_ritesh Administrator Administrator

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    Gosh Rage! for a sec i read the header as "Time to privatise India's national flagship aircraft carrier?: Your take", and i was like "aircraft carrier", - wow! what would that mean and is it possible :D. getting old real fast, am i?

    wasnt ins vikrant supposed to be initially sold of as a private property to be run as a hotel.

    anyways, got to put a vote of consent for privatisation to happen, probably the only way ahead to save the legendary airline which has had one of the finest histories to well some really atrocious balance sheet off late.

    begin with sale of minority stake as they are doing with the other PSUs, helps us fix our fiscal deficit further for the current financial year, increase the sale to majority in another few years but with in the tenure of this government, and in the following years do away with the airline completely.

    if possible, would love to see the airline head the TATA way.
     
  20. sky

    sky Regular Member

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    India is better of spending the money that AI eats up on airport expansion as well improving the airport infrastructure. In my opionion why spend taxpayers money on subsidizing someone to travel,it should be spent rather on the infastrucure of travel.

    Then let private companies take the risk of operating the service,like kingfisher among many other's.The job of the goi should be to provide the best and modern infrastructure facilities,weather thats road,rail,air or even sea.

    About 20 years ago british airways was privatised by our government because it was loss making.It was the best decision that they ever made because it forced them to shape up for the threat of competition.Without that kick up the back side they would have cost us a fortune,no pain no gain.
     
  21. Singh

    Singh Phat Cat Administrator

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    While we are at it, privatize AAI ie Airports Authority of India, and outsource Immigration, ATC, Security and Customs to private players.
     

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