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Monday, May 28, 2012

Pilot strike enters 21st day - cripples Air India

Sad, the  strike by pilots of national carrier Air India continued for the 21st day today [28th May 2012] mounting losses to more than Rs 300 crore (about $55 mn).

The Aviation industry in India  for long has been considered to be one of the fastest growing sectors globally. The sector has undergone rapid transformation since the liberalization drive that began in the earlier half of the decade.  In 1932, JRD Tata founded Tata Airline, the first Indian airline. At the time of independence, nine air transport companies were carrying both air cargo and passengers.In early 1948, Government of India established a joint sector company, Air India International Ltd in collaboration with Air India (earlier Tata Airline) with a capital of Rs 2 crore and a fleet of three Lockheed constellation aircraft.   The Government nationalized nine airline companies vide the Air Corporations Act, 1953. These government-owned airlines dominated Indian aviation industry till the mid-1990s. In April 1990, the Government adopted open-sky policy and allowed air taxi- operators to operate flights from any airport, both on a charter and a non charter basis and to decide their own flight schedules, cargo and passenger fares.

The Ministry of Civil Aviation of the Government of India is the nodal Ministry responsible for the formulation of national policies and programmes for development and regulation of Civil Aviation and for devising and implementing schemes for the orderly growth and expansion of civil air transport.

It was to be a marriage of convenience – but has irked all partners – going terribly wrong.  Years ago, Indian Airlines (IA) was merged into Air India (AI) to form Air India Limited (AIL), the faultlines among its employees are sharper than ever and threaten to pull the entire airline into an abyss.  Indian Pilots’ Guild (IPG), a union that represents pilots from the erstwhile Air India, are on strike

When formed Air India had ‘Maharaja’ as its logo, whose hospitality has now touched newest lows, with losses mounting to thousands of crores year after year; worser still, the market share of the airline has also slipped terribly.  Before the merger in 2007, Air India had been profitable for 4 straight years and Indian Airlines for 3 years.  After the merger, it has been downhill all the way, with the combined entity posting increased losses with every passing year.   ‘We call him a Maharajah for want of a better description. But his blood isn't blue. He may look like royalty, but he isn't royal.' These are the words of Bobby Kooka, the man who conceived the Maharajah.  The famous figure made its appearance in Air India in 1946 when Kooka was the Commercial Director; he, Umesh Rao, an artist with J.Walter Thompson Ltd., Mumbai, together created the Maharajah.  He symbolized grace and high living…. His outsized moustache was most prominent.   Now after 50 years, he is struggling in existence is indeed sad state of affairs.  

Now the merged entity is sucked deep into losses with the current losses alone estimated around Rs.300 crore.  These are losses of ticket cancellations, unused labour and bulk of Boeing 777 fleet being grounded – reports IANS.  From 1 June, the airline will operate only 38 services instead of the regular 45. The airline had decided last week to reduce fares by placing a large chunk of seats under the lowest fare category to augment its share in the domestic and international sector.  The price reductions, truncation of schedule whereby seven International destinations including Hong Kong, Osaka, Seoul and Toronto, being dropped from the regular routes are loss of face but still measures aimed to curb the rising losses.  That makes the operations under a contingency plan whence  only a bare minimum number of flights are maintained by clubbing operations to various destinations in Europe and the United States.  Still, Air India has maintained that it has enough executive pilots to operate long-haul destinations in the US and Europe.

The ground (or grounded) reality is that the Pilot’s  strike has crippled its operations and they are even thinking of wet leasing i.e., renting of aircraft with pilots and cabin crew.  The Board has to urgently decide on the induction date of the Boeing 787 Dreamliner into the carrier’s fleet and a voluntary retirement scheme (VRS) for employees.  Things certainly do not look rosy for the Indian National Carrier.

Chaudhary Ajit Singh founder member of Rashtriya Lok Dal  is presently the Civil Aviation Minister. He is the son of former prime minister of India and Jat leader Choudhary Charan Singh.

With regards – S. Sampathkumar.
28th May 2012.

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