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India: A billion aspirations

Perspectives on South Asian politics

September 11th, 2009

The Jet strike: Where does the buck stop?

Posted by: Vipul Tripathi

The distraught foreign national and her wheelchair-bound mother on TV is a compelling argument against the Jet Airways pilots’ strike which has dragged on for four days.

The stand-off between the pilots and the airline management over the sacking of four pilots has forced the airline to cancel hundreds of flights, affecting at least 14,000 passengers since Tuesday.

The public inconvenience caused by such strikes is so pressing that the cause of the strike almost always seems petty.

But striking employees are not always to blame over fragile labour relations.

There have been years when man-days lost due to lockouts have surpassed those caused by employee strikes.

In the current strike, the management as well as the pilots’ union have been pointing fingers.

On Wednesday, the High Court had issued a contempt notice to the pilots for going on ‘mass leave’.

A day later, the chief labour commissioner said that it was illegal to dismiss the pilots while conciliation proceedings were still on.

So who is responsible for this chain of events?

August 20th, 2009

India’s unfriendly skies

Posted by: GlobalPost

- Saritha Rai writes for the GlobalPost, where this article first appeared. -

Not long ago, passengers of India’s airlines were spoiled with choices. One promised to treat them like a maharajah. Its passengers were greeted curbside by friendly staff who eagerly took their bags. Once aboard, glamorous female flight attendants waited on the passengers.

Another offered meal choices from a list so long that it ran off the page, even on flights that lasted less than two hours. A third had fares so low that thousands of train passengers found it cheaper and faster to fly.

“I always felt like royalty when I traveled, it was all so unreal and fantastic,” said Janaki Murali, a frequent flyer who works with one of India’s largest outsourcing firms based in Bangalore.

Alas, it was also too good to last.

Last week, a grouping of 10 private carriers –  including popular upstarts Kingfisher Airlines and Jet Airways –  threatened to stop operations for a day on Aug. 18 to draw attention to their sorry financial plight. A strike, they reasoned, would be a dramatic way to get the attention of the government.

And with reason. Private airlines have been a key part of India’s economic boom: they ferry more than half of the country’s passengers.

But the carriers are hurting, due to a combination of slower economic growth and government policies. State taxes make jet fuel 60 percent more expensive, one of the highest tax structures in the world. (The government uses the funds to subsidize the cost of others fuels such as kerosene and diesel for poorer Indians.)

Private carriers have long lobbied the government to reduce these aviation fuel taxes, as well as high airport charges, so far to no avail.

Vijay Mallya, the flamboyant owner of Kingfisher Airlines — which is named after Mallya’s beer brand — said India’s airlines were being “taxed to death.”

For now, the crisis has been averted. A public outcry and a tough-talking government forced the private airlines to back off from their strike plan. The Federation of Indian Airlines (FIA) said that the boycott was canceled “in view of the agitated public sentiment” and the government’s call for a dialogue.

But some of the private airlines’ woes have been their own doing. During the aviation boom of the last few years, private airlines have proliferated.

Many airlines, including Kingfisher and Jet Airways, have built up excess capacities, even as cut-throat competition and falling demand for air travel have eaten away their profits. The FIA said India’s airlines lost $2 billion during the last financial year.

But even as private airlines demanded the government ease some of their financial burden, Delhi is considering handing a $3 billion bailout package to the national carrier, Air India.

The bloated state-owned airline is a loss-maker crumpling under its own debt. Air India has 147 aircraft but about 47,000 employees - making it the most profligate employee to aircraft ratio in the world.

Meanwhile, private airlines are also pushing the government to ease the current rules that ban foreign carriers from buying a stake in domestic airlines.

For many, foreign investment appears the only hope for raising funds, a challenge at a time when the biggest global airlines are themselves cash-strapped.

Clearly, the days of big orders for planes, new routes and lavish marketing budgets are over. Right now, India’s airlines are just fighting for survival.

For passengers like Janaki Murali, who had quickly gotten used to the premium service and an abundance of flight choices, that is a hard landing indeed.

More from Global Post:

The Ugly Indian

The Mormons in India

Can you outsource God?

July 20th, 2009

Uneasy numbers stacked against Air India

Posted by: Prem Udayabhanu


State-run Air India, which enjoyed a monopoly in the country till the deregulation of the aviation sector in 1991, is besieged by ballooning debt and a litany of woes, pushing it to the brink of collapse.

Unless, of course, the central government steps in to bail out the national flag carrier.

Air India is now seeking a 39.81 billion rupees package from the state, though the airline has been asked to come out with a plan of action to make its existence viable.

The money may come as federal aid in the form of equity and loan.

But some say the airline needs a credible action plan to rescue it.

The civil aviation ministry says the 31,000 workforce should be trimmed to keep it viable. Estimates put the average number of employees per aircraft at nearly 1:230, while as per international standards, an airline needs 1:100 -150 employees.

Others question whether the ministry, which presides over the National Aviation Company Ltd created to run the merged Indian and Air India, can absolve itself from the faultlines posed by the bloated workforce.

Complimentary travel in business class for its employees is one of the perks authorities seek to curb. How much would such a measure help the carrier?

But is the high employee-aircraft ratio the sole reason for the airline’s woes, though it accounts for 40 billion rupees as wages annually for the troubled airline?

Air India’s debt in June 2009 more than doubled to 152 billion rupees from 65 billion rupees in November 2007. And that was mainly due to massive aircraft orders placed by the beleaguered firm with aircraft makers — 68 with Boeing and 43 with Airbus.

The orders were placed when the country was beginning to witness an aviation boom, but some analysts say the airline did not have the much needed aircraft when it really wanted them.

The opposing point of view is that you always need aircraft to catch up on a boom next time around.

Forty-nine aircraft have been received so far, but the aviation boom did not last long enough to justify the huge orders for the struggling airline, which placed orders worth nearly 440 billion rupees.

Four out of ten seats are vacant now, but that statistic can be tagged to many airlines as a global economic recession and soaring oil prices dented appetite for air travel.

Were the additional aircraft ordered without properly identifying the potential?

Nearly 30 airlines have become defunct globally in the past one year alone.

Now, wonks seek a renegotiation as part of the umpteen measures needed to lift the sagging fortunes of India’s state-run airline.

But any cancellation or deferring of placed orders would also invoke some penalty from aircraft makers.

Air India’s international market share dipped to about 18 percent in the last fiscal from 21.7 percent a year ago, while a percent of its domestic market share also declined to touch 16.9 percent in the period.

Airline passenger numbers dipped about 8 percent in the first half of 2009, adding to the mountain of woes faced by Air India.

In punctuality too, Air India’s domestic service stood fourth with a 75.7 percent record, behind Indigo (87 percent), Jet Airways (86.4 percent) and Go Air (83.4 percent).

Many bilateral agreements also allegedly ceded Air India’s market share to foreign air lines, while some huge revenue earners like ground handling operations in Bangalore and Hyderabad were gifted on a platter to foreign players.

Aviation experts say the merger of Air India and Indian also did not have the desired impact.

So what would a turnaround for the airline involve?

Many say it will surely be a herculean task for the top brass of the airline. They are charting a rescue plan which would be whetted by SBI Caps before it is placed to the federal government for approval.

Can privatisation revive the dipping fortunes of Air India? Does it need aviation experts rather than bureaucrats to pull off a turnaround?

October 17th, 2008

Tears, threats, triumph in Jet Airways layoff drama

Posted by: Rina Chandran

jet.jpgI was on a Jet Airways flight from Delhi to Mumbai on Wednesday, the day the airline said it may lay off a further 1,100 employees in addition to the 800 it had retrenched.

Outside the Delhi airport, TV news channel vans had lined up; inside, Jet staff at the counter tried not to meet the sympathetic eyes of passengers. Aboard the aircraft, which had telltale empty seats, newspapers folded into seat pockets had headlines of the layoffs.

I wondered if any of the efficient stewards and stewardesses had been tempted to rip off the covers, or if they were just relieved they were not on probation.

On Thursday, ministers and political parties weighed in on the retrenchments, some calling them illegal, others calling them ill-timed.

Chairman Naresh Goyal, late on Thursday, said he was reinstating the sacked employees because he “could not sleep at night”.  The tired protesters cheered.

No one questioned the logic of Jet returning leased aircraft or putting its international expansion on hold to cut costs. So why the furore over the layoffs?

Because the sight of the well-groomed stewards and stewardesses in their smart uniforms, shouting “We want our jobs back”, struck a chord with us.

Because thousands of middle-class Indians had boarded an aircraft for the first time in recent years as new discount carriers and low fares had given them an opportunity to fly home for the festival season or take their family on vacation.

Because new airlines had given thousands of young men and women, many from small towns, a ticket to glamorous jobs in the city.

Because an industry that had grown at an average pace of more than 25 percent, headed by a suave politician, with its promise of gleaming new airports and shiny aircraft, had come to symbolise “India Shining” again.

“During the boom we hired people, gave them big salaries. Now, in the downturn, there will be layoffs,” said Kapil Kaul, chief executive in India for the Centre of Asia-Pacific Aviation.

“It’s the new reality that we have to adjust to.”

July 14th, 2008

Travel Agents protest with sweets and smile

Posted by: Bappa Majumdar

rtr1sgpx.jpgTaking a cue from a popular 2006 Bollywood film, where the hero follows the path of non-violence to protest against injustice,  hundreds of travel agents in India sent sweets to airline offices on Monday to protest against a cut in their commission.

Come October, and most airlines in India will stop paying commissions to travel agents, citing rising operational costs.

This will effectively seal the fate of hundreds of agents who will have to close shop for good.

In India, travel agents get a five percent commission on basic fare from airlines and most of them do not charge passengers any extra money.

On Monday, about 1000 agents of the Travel Agents Federation of India (TAFI) dispatched boxes of sweets and flowers to offices of various airlines across the country.

An airline official admitted he was initially clueless to receive so many sweets for taking such a tough decision.

“We decided to follow the path of Mahatma Gandhi, as depicted in a Hindi film and tell the airlines that this is how we will protest everyday,” Anil Punjabi, chairman of TAFI says.

The film Punjabi is taking about is “Lage Raho Munnabhai” or “Carry on Munnabhai” which stars popular actor Sanjay Dutt.  He follows Gandhian values and the path of non-violence as preached by Mahatma Gandhi to protest when some aged people are thrown out of an old-age home.

The film won rave reviews and won four national awards, and people began emulating the Gandhian way briefly.

Now that it is back, I wonder whether this could be the new way of resolving corporate wars and disputes ?