1. Air India’s Ashwani Lohani forced to hit the ground running from day 1

Air India’s Ashwani Lohani forced to hit the ground running from day 1

Ashwani Lohani, an Indian Railways Service of Mechanical Engineers officer, who took charge as the new chairman and managing director of the loss-making Air India on August 31, will probably face his first test in the coming days.

By: | Mumbai | Updated: September 13, 2015 12:37 AM
Ashwani Lohani, Air India

Even if Ashwani Lohani is able to tackle these immediate challenges, there are important long-term ones, which would test his mettle. (Photo: twitter.com)

Ashwani Lohani, an Indian Railways Service of Mechanical Engineers officer, who took charge as the new chairman and managing director of the loss-making Air India on August 31, will probably face his first test in the coming days. This is because one of the national carrier’s pilot union, Indian Commercial Pilots’ Association (ICPA), is conducting

a secret ballot to decide whether to declare a strike against a recent notification by the airline management removing pilots from the workmen category.

The outcome of the ballot is expected to be known by sometime next week, and if the news is not good, all eyes will be on the new CMD to see how effectively he tackles the crisis. His innings, as it is, did not begin on a positive note. The day he took charge, the pilots’ union asked its members to stick to what is called ‘work to rule’, or sticking to flight duty hours and rejecting any request to extend working hours in case of a flight delay. This is because the pilots are miffed with the decision of the airline to put commanders out of the workmen category of the Industrial Disputes Act. This means commanders can no longer be part of trade unions and their service conditions can be changed and they will not be able to raise a dispute against their employers.

air-india

Even if Lohani is able to tackle these immediate challenges, there are important long-term ones, which would test his mettle. Since during his previous stint as the head of Madhya Pradesh Tourism Development Corporation, he did a creditable job by successfully putting the state on the tourism map of the country, there’s hope that he might be able to turn around the airline, a tough task considering that several of his predecessors have failed.

While the airline has made some improvements on certain parameters, it’s still far from meeting the turnaround plan drafted for it, based on which it has been given a R30,000-crore bailout package by the government.

In order to be eligible for government equity infusion, Air India, which is reeling under a heavy debt burden of over R44,000 crore, has to meet certain operational and financial parameters laid down under a turnaround plan (TAP), which was drafted by SBI Capital Markets in February 2012. During FY15, the airline’s top line was at R19,781 crore, as per a parliamentary statement, lower than an internal estimate of R21,300 crore, and a TAP target of R23,569 crore.

Similarly, the airline reported a net loss of R5,547 crore, against the internal target of R4,346 crore, which is also higher than the TAP target of R3,241 crore. The government has pumped in R2,500 crore in 2015-16, R5,780 crore in 2014-15, and R6,000 crore each in 2012-13 and 2013-14 into the airline.

Further, in this year’s supplementary demand for grants, R800 crore was provided as additional equity infusion. The airline is expected to cut its net loss by about a third to R3,500 crore during the current fiscal as a result of a significant reduction in fuel costs and improvement in operating performance. It is also expected to report an operating profit of about R10 crore during FY16, its first annual operating profit since the implementation of the TAP in 2012, provided crude oil prices remain below $70 a barrel.

Jet fuel prices, which constitute about 45-60% of airline’s expenses, have fallen over 30% in the last year.

The challenge for the new CMD will be to run Air India as efficiently as some of the private airline’s are run and balance the social obligations of the national carrier with that of making profits, a senior Air India official had earlier told FE.

“I think a good point to start is to get the On Time Performance (OTP) of the airline on a par with the market leaders. If Air India achieves that, it will not only strengthen the brand and attract more passengers, but also help reach profitability faster,” the official said.

  1. A
    Anup
    Sep 13, 2015 at 7:18 am
    Flogging a dead horse.
    Reply
    1. B
      bhasker misra
      Sep 13, 2015 at 8:54 am
      A diffecult task indeed but if only hr issues r sorted out first amicably mainly in operations and engineering generously air India can be in for a surprise turn around
      Reply
      1. R
        rohit kumar
        Sep 15, 2015 at 4:31 am
        nice to get 360 degrees feed back but why was 1C in AI 502 kept vacant yesterday 13.09.2015 by the new CMD. It is loss of revenue
        Reply
        1. S
          sam
          Sep 13, 2015 at 2:10 pm
          traveled recently on AI 127. The crew have simply rearranged the business seats and had six crew members use those seats. cost of those seats at minimum 20,000 dollars. Try to book the same seat, you get the answer there are no seats available. Typical govt run airline with little concern of financial losses. The food is horrible and seats are worn out.
          Reply
          1. S
            S KUMAR
            Sep 20, 2015 at 2:07 pm
            1 VERY Basic… In a small shop selling sweets ,the owner will reduce the production of those sweets which are causing high losses due to high input costs or having low s…. Air India should consider to reduce operational frequencies of top 50 loss making flights..till they cannot cut costs. LIMITATION TO AIR INDIA…..Here in air india no one acts as owner…staff will resist the reduction in frequency of even a single flight…REASON ??…who will suffer for the contracts for inflight catering/hotels for crew/transport for crew /posting of staff abroad say at Newyork,London etc which have been awarded under the table…..no one dare move it against the other staff as most awarding contracts have individual vested interests first and company later….. May be Mr lohani will force act as that small shop owner and decide to temporarily reduce production of heavily loss making product(here flights)..till he is able to cut costs on operating those flights….AND UTILISE THOSE EXTRA AIRCRAFT ON ADDITIONAL ROUTES INSTEAD OF LOOKING FOR LEASING AIRCRAFT…. Make sure to carefully note the people who object to this move….they will give directions to corrections…A VIEW TO BE CONSIDERED SIR BEFORE IGNORING RIGHT AWAY……
            Reply
            1. S
              S KUMAR
              Sep 20, 2015 at 2:37 pm
              2 PILOTS IN AIRLINES ARE LIKE HEART SURGEONS ARE IN A HEART HOSPITAL….. THEY NEED NOT TO BE MENTALLY DISTURBED OTHER WISE ONE ARE NOT SAFE IF COME UNDER THEIR OPRATION ..EITHER IN AIRCRAFT OR ON OPERATION TABLE.. One has to believe that no heart surgeon or a pilot will cause any agitation till the end possible….but will concentrate on his/her profession which is critical and scarce… A HEART SURGEON MAY BE OPERATING 5 HEARTS DAILY AND MAY BE DRAWING RS 20000 PER OPERATION ..1.0.LAC PER DAY….WE CANNOT COMPARE HIS RY TO AN OFFICE STAFF..SAME WAY A CO PILOT MAY OPERATE 3TO 4 FLIGHTS PER DAY AND IF WE PAY RS 2500 PER TAKE OFF THAT WILL BE RS 10000 PER DAY…AND A COMMANDER DOUBLE THAT IS RS 5000 PER FLIGHT THAT IS ABOUT RS 20000 PER DAY (TAXABLE)…AGAIN A STAFF /TYPIST IN OFFICE JOB NEED NOT COMPRE RY WITH HIM BY ANY WAY….A STAFF IS TO COMPARE HIS /HER RY TO OTHER ORGANISATION PSU OR BANK….THEY WILL FIND IN AIR INDIA THEY ARE EXTRACTION DOUBLE THAN THEIR MARKET WORTH…. That is the causative factor in air india trouble…. About 20000 staff extract more than double their market worth and put beam of wages towards 1000 PILOTS AND 1000 Engineers… AIR INDIA AT START A COPILOT IS GIVEN RS 800-1000 TO FLY AN A320 AIRCRAFT FROM DELHI TO BOM..…(FOR 60 -80 FLIGHTS A MONTH A RY OF 60000 PM..) Same way an Engineer at start grade for certifying 60-80 flights per month gets 60000-80000 per month…that is RS 1000 for one aircraft . A TYPIST TO TYPE 20 LETTERS IN A MONTH IS CHARGING 40000 PER MONTH SITTING IN OFFICE..RS 2000 PER LETTER TYPED.. AIR INDIA SHOULD RECHECK ON THIS FEED BACK …. Air INDIA NEEDS TO SHIFT ITS BEAM TOWARDS REAL CULPRITS AND NOT TOWARDS THE CONTINUOUS BEARD EARNERS…. MY VIEW FOR CONSIDEARTION IF FOUND CORRECT ON DATA..OTHERWSE TREAT AS REJECTED ..Pls write to me about my views on top 10 points which need attention in plan 1 action ..
              Reply
              1. S
                S KUMAR
                Sep 22, 2015 at 5:23 pm
                22.9.15 (2).Air india may consider workout turn around in a scientific A B C analysis method.. Taking A cl items on top priority..viz. A cl….First priority should be consolidate finances … .a)find out total costs incurred in each international flight such as DEL LONDON DEL say during MONTH OF MAY 2015 and try to reduce on costs b)Monitor revenue earned from each flight daily/monthly graph methods….for eg…Revenue earned on DEL LON DEL FLIGHT during each day of may and also total in may 2015….find innovative ways to earn on extra revenue…. As example FILL LAST MINUTE EMPTY SEATS BY LOTTERY TICKET METHOD…..Make last minutes concessional coupens available at 25% of basic fare ….they can be converted to tickets based on last minute availability of seats (leaving some reservations for staff discounts)This will ensure no seats will perish. Advantage….air india can sell crores of rupees of discount coupens of values RS 1000 to RS 10000 IN ADVANCE to public who may like to use cheaper last minute chance tickets. B cls…..a)Methods to reduce expenses in booking offices/lounges/offices/workshops/and wages and allowances. C Cl…a) Disciplines and productivity issues. Note ..A AND B CL ACTIONS ARE PURELY DUTIES OF TOP MANAGEMENT. All three cles are essential but If A cl and B cl actions are not done first by CMD and C cl actions concentrated first …precious time and Energy will be lost and will further demotivate staff for no actions on A and B areas… AIR INDIA CMD MAY PLEASE ASK SOME ONE TO SUBMIT A STUDY REPORT ON THESE WITHIN ONE MONTH ….This will yield result … A B C analysis of attempting to issues was so far not done in Air INDIA ..JUST TRY…
                Reply
                1. S
                  S KUMAR
                  Sep 20, 2015 at 2:44 pm
                  VERY Basic… In a small shop selling sweets ,the owner will reduce the production of those sweets which are causing high losses due to high input costs or having low s…. Air India should consider to reduce operational frequencies of top 50 loss making flights..till they cannot cut costs. LIMITATION TO AIR INDIA…..Here in air india no one acts as owner…staff will resist the reduction in frequency of even a single flight…REASON ??…who will suffer for the contracts for inflight catering/hotels for crew/transport for crew /posting of staff abroad say at Newyork,London etc which have been awarded under the table…..no one dare move it against the other staff as most awarding contracts have individual vested interests first and company later….. May be Mr lohani will force act as that small shop owner and decide to temporarily reduce production of heavily loss making product(here flights)..till he is able to cut costs on operating those flights….AND UTILISE THOSE EXTRA AIRCRAFT ON ADDITIONAL ROUTES INSTEAD OF LOOKING FOR LEASING AIRCRAFT…. Make sure to carefully note the people who object to this move….they will give directions to corrections…A VIEW TO BE CONSIDERED SIR BEFORE IGNORING RIGHT AWAY…
                  Reply
                  1. S
                    S KUMAR
                    Sep 20, 2015 at 2:44 pm
                    VERY Basic… In a small shop selling sweets ,the owner will reduce the production of those sweets which are causing high losses due to high input costs or having low s…. Air India should consider to reduce operational frequencies of top 50 loss making flights..till they cannot cut costs. LIMITATION TO AIR INDIA…..Here in air india no one acts as owner…staff will resist the reduction in frequency of even a single flight…REASON ??…who will suffer for the contracts for inflight catering/hotels for crew/transport for crew /posting of staff abroad say at Newyork,London etc which have been awarded under the table…..no one dare move it against the other staff as most awarding contracts have individual vested interests first and company later….. May be Mr lohani will force act as that small shop owner and decide to temporarily reduce production of heavily loss making product(here flights)..till he is able to cut costs on operating those flights….AND UTILISE THOSE EXTRA AIRCRAFT ON ADDITIONAL ROUTES INSTEAD OF LOOKING FOR LEASING AIRCRAFT…. Make sure to carefully note the people who object to this move….they will give directions to corrections…A VIEW TO BE CONSIDERED SIR BEFORE IGNORING RIGHT AWAY…
                    Reply
                    1. S
                      S KUMAR
                      Sep 20, 2015 at 2:42 pm
                      VERY Basic… In a small shop selling sweets ,the owner will reduce the production of those sweets which are causing high losses due to high input costs or having low s…. Air India should consider to reduce operational frequencies of top 50 loss making flights..till they cannot cut costs. LIMITATION TO AIR INDIA…..Here in air india no one acts as owner…staff will resist the reduction in frequency of even a single flight…REASON ??…who will suffer for the contracts for inflight catering/hotels for crew/transport for crew /posting of staff abroad say at Newyork,London etc which have been awarded under the table…..no one dare move it against the other staff as most awarding contracts have individual vested interests first and company later….. May be Mr lohani will force act as that small shop owner and decide to temporarily reduce production of heavily loss making product(here flights)..till he is able to cut costs on operating those flights….AND UTILISE THOSE EXTRA AIRCRAFT ON ADDITIONAL ROUTES INSTEAD OF LOOKING FOR LEASING AIRCRAFT…. Make sure to carefully note the people who object to this move….they will give directions to corrections…A VIEW TO BE CONSIDERED SIR BEFORE IGNORING RIGHT AWAY……
                      Reply
                      1. S
                        S KUMAR
                        Sep 20, 2015 at 2:43 pm
                        … VERY Basic… In a small shop selling sweets ,the owner will reduce the production of those sweets which are causing high losses due to high input costs or having low s…. Air India should consider to reduce operational frequencies of top 50 loss making flights..till they cannot cut costs. LIMITATION TO AIR INDIA…..Here in air india no one acts as owner…staff will resist the reduction in frequency of even a single flight…REASON ??…who will suffer for the contracts for inflight catering/hotels for crew/transport for crew /posting of staff abroad say at Newyork,London etc which have been awarded under the table…..no one dare move it against the other staff as most awarding contracts have individual vested interests first and company later….. May be Mr lohani will force act as that small shop owner and decide to temporarily reduce production of heavily loss making product(here flights)..till he is able to cut costs on operating those flights….AND UTILISE THOSE EXTRA AIRCRAFT ON ADDITIONAL ROUTES INSTEAD OF LOOKING FOR LEASING AIRCRAFT…. Make sure to carefully note the people who object to this move….they will give directions to corrections…A VIEW TO BE CONSIDERED SIR BEFORE IGNORING RIGHT AWAY…
                        Reply
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