Compete Strategize With Human Capital By Dr Ekta Sharma

                                                                                                                                  AIR INDIA , the brand that today encompasses both the erstwhile Air India and Indian Airlines, is in serious trouble. The National Aviation Company of India (NACIL), formed by the merger of the two airlines, ran up losses of Rs 2,200 crore in 2007-08. Losses for 2008-09 estimated at over Rs 5,000 crore. In 2009-10, losses could exceed Rs 12,000 crore. How did the airline get into such a mess?       Parliament's Committee on Public Undertakings (COPU) has come up with a report that seeks to identify th...

 After the merger of Air India and Indian Airlines, the government promised no-layoff policy to the trade/labor unions which went on to strike to secure continuity in employment for the staff. So the rationalization of the workforce was not done. Not only that, the employees were not trained in new technology and digitalization.  Now after the acquisition of Air India by Tata group, the management realized the need to rationalize the workforce to reduce redundancies and also to align the talent planning with the change in the strategy of the new management. The new management believes that to compete in the aviation market they would require the technology up-gradation of their fleet as well as the processes, and to achieve this talent planning is important.  At the time of acquisition, Air India had 13,000 employees, out of which 8,000 were permanent employees and rest contractual. Out of these, 4,000 employees would reach superannuation in the next two years. The new ma...

  “History repeats itself” I n 2017, the airline continued making losses, and its debt ballooned to Rs 50,000 crores while it continued to lose significant domestic and international market share. Yet again, the government set out to privatize Air India despite failing in 2000. In March of 2018, they issued an expression of interest to sell a 76 percent stake of the perennially loss-making airline and also a 50 percent stake of Air India SATS Airport Services Pvt Ltd, a ground handling joint venture with Singapore Airport Terminal Services. T his attempt at privatization asked the bidders to take on Rs 33,392 crores worth of debt and submit a bid by the month of May 2018. It isn’t surprising that no private firms showed any interest in buying the debt-laden airline. H istory had repeated itself. The government had classically failed to privatize Air India. Although the Airline was massively failing, it was undeniable that Air India had somehow become a symbol of ‘national pride’. T...

  I n 2012, International Air Transport Association (IATA) reported that nearly 3 billion people and 47 million tons of cargo were transported by air. The Civil Aviation Industry made an aggregate profit of USD 7.6 billion on revenues of 638 billion which is a 1.2% net profit margin. This was despite world GDP growing at 2.1% and oil averaged a record high of 111.8 dollars a barrel.  Strong economic growth in emerging markets resulted in an expansion of passenger connectivity.  IATA announced that for 2013 airlines were expected to return a global net profit of 12.9 billion. Indian Civil Aviation Scenario was seeing signs of revival. In early 2013, then Civil Aviation Minister Ajith Singh announced at a gathering that Air India was to see a 20% increase in the total revenue by the end of the financial year 2013-14. This meant an expected increase in revenue from Rs 16,130 crores to Rs 19,393 crores. The reality wasn’t as colorful. F ast forward to the monochromatic end av...

  I n 2011, Vayalar Ravi, then Civil Aviation Minister set up a Parliamentary committee to analyze the failure of the merger. The committee was chaired by a retired Supreme Court Justice D.M Dharmadhikari. The committee thoroughly examined the integration, structure of employees, working conditions, and various schemes and also made several recommendations relating to the same. T he merger didn’t help the losses that each of the entities had incurred. The merged entity totaled a loss of Rs 2,226 crore in 2007-08 with a turnover of Rs 13,638 crores. In the following financial year, NACIL reported a loss of Rs 5,548.  W hen the losses were alarming, SBI caps was appointed to hatch out a road map for the merged entity. SBI prepared a short-, medium- and long-term growth plan for Air India. As per SBI’s reports, the carrier needed at least two years from 2009 to merely break even given the revenue. The annual average revenue was about Rs 16,000 crores. Amongst its several other de...

  P ompous flaunt, nosy relatives, and huge debts are all features of Big Indian weddings and one other event; the merger of Air India and Indian Airlines.  Air India and Indian Airlines were merged into a single entity in 2007. While the implementation of the merger was abrupt, the idea had been tabled for discussion for decades. It was first brought up by former Prime Minister Rajeev Gandhi in 1984. In 1985, the “National Airports Authority of India”, “Pawan Hans” and “Indira Gandhi Rashtriya Udaan Academy” was set up. Through the set-up of these institutes, the then Prime Minister attempted to strengthen Indian Civil Aviation, and the merger of Air India and Indian Airlines was actively discussed. At that time, Indian Airlines did not carry the same brand as Air India and hence a merger would have meant the dilution of the brand carried by Air India. Citing the aforementioned reason, the idea of a merger was dropped. As the competition grew more aggressively, the idea ...

  T he year 2003 is noteworthy in the history of Air India due to a plethora of reasons. The competition was rising as more foreign carriers were expanding their operations. Air India’s load factor dipped to 70.5% in 2003-04 from 73.1% in 2001-02. Fortunately, it turned out to be the year of revival. Under the stewardship of J.N Gogoi and Sunil Arora, Air India managed to stay afloat. The management of Air India and the Ministry of Aviation worked in unison for the first time in decades. At that point, Air India’s functioning was regularly crippled by the overwhelming number of labor unions.  The lack of competent leaders in the past had built the bargaining power of these unions. During the outbreak of SARS, the Indian Pilots Guild placed forth a directive that demanded the halt of the operation of flights to all SARS-affected countries in Asia. If there was a crew member or a passenger who had traveled to a SARS-affected country in the past 10 days and if they were now in a...

     Indi go-es   to the Air India Magic is in the air of India. India witnessed this magic on the 2nd of July, 2022. Magic of change, Magic of confidence, Magic of trust….. The Sunday papers carried an interesting headline. “Passengers faced delays on Saturday and  more than half of the flights operated by India’s largest airline departed late  after a large number of its  cabin crew members  called in sick ”. The mass leave of the employees was attributed to the recruitment drive of Air India which is recently bought by the Tata group. Isn’t it magic?? The airline against which employee unrest pervaded for more than a decade, is now causing tremors to the competitors. The fact that Air India is able to attract prospective employees from its competitors despite the widely known discontent amongst its employees is nothing short of ‘magic’. It is certainly early to conclude but time shall reveal if the change in ownership is the source of this m...