Neha Jain: http://indianairlinesnews.blogspot.com/4 m

1. Air India plans to rejig top management structure
MUMBAI/NEW DELHI: Air India plans to rebuild its top management team as three high-profile executives, including its expat chief operating officer Gustav Baldauf, called it a day following differences with the civil aviation ministry.

The airline's chairman and managing director Arvind Jadhav, who faces the flak for bringing executives from outside on exorbitant salaries, will make a presentation on the new management structure at the forthcoming board meeting. The airline's board is slated to meet on March 15.

"The CMD is expected to present his plan on what the new management structure should be in the forthcoming board meeting. However, changing management structure at the top won't make any difference unless the employees cooperate," said a top civil aviation ministry official.

Though recent resignations have raised questions about Jadav's ability to achieve a turnaround, he has the support of the new civil aviation minister Vyalar Ravi

"I'm happy and satisfied with Arvind Jadhav's performance and have no problems with him," said Mr Ravi. Jadva's term saw Air India slipping to the fourth position in terms of domestic market share.

Jadav, however, will have to convince the board if he wants to retain the post of COO for Air India and its low-cost arm Air India Express. The airline's CMD will take a conservative approach this time, according to aviation industry officials.

"There was no framework of job requirement or no definite role and accountability for the selections that were made for people who were got from outside and made as Air India honchos," said a senior Air India official who had opposed the selection process.

The chief operating officer of Air India Express, Pawan Arora, was sacked last month and Air India's chief training officer, Stephan Sukumar, resigned last week.

Civil aviation minister feels it is tough to induct people at the top. "The question of inducting new people at the top is not easy and I can't talk about these plans in public like this. I have to consult my ministry and experts before deciding on that," Ravi added.

The board meeting is also likely to approve the turnaround plan, which is being finalized by consultancy firms Deloitte and SBI Caps. Air India will get an equity support of 1200 crore from the government. It will also restructure its debt ( 40,000 crore) and is likely to go aggressive to regain market share.

2. DYFI stages sit-in at Air India office
THIRUVANANTHAPURAM: Tension prevailed at the office of the National Aviation Company India Limited (Air India) at Vellayambalam here on Thursday after a group of DYFI workers staged a protest alleging backdoor recruitment. The agitators led by DYFI president Sreeramakrishnan staged a sit-in in front of the office and demanded that the backdoor appointment should be stopped.
They alleged that appointments are being made by Air India to various posts at airport in association with the Singapore Airport Terminal Services without proper notification. Moreover, the recruitments are being conducted after the declaration of Assembly election, the DYFI leaders said.
They alleged that the Air India officials were collecting huge amounts as bribe from the candidates. A detailed probe should be conducted to find out the role of Civil Aviation Minister Vayalar Ravi in these recruitments, they said.
The agitators later disbursed following the intervention of the police.
It is learnt that the recruitments were being conducted to AISATS, the newly-formed joint venture company of Air India and Singapore Airport Terminal Services (SATS) for carrying out ground handling services at various airports. Air India officials, however, were not available for comments.

3.'‘Indifferent sarkari attitude’ cost Air India brand globally: CAG
Merger of state-owned airlines, erstwhile Indian Airlines into Air India, has come under the Comptroller and Auditor General's (CAG) scrutiny. In its final report, the auditor noted that till date Air India does not have any time bound plan to merge key activities. Further, Air India brand has taken a beating in the international arena due to “an indifferent sarkari attitude,” it noted.

CAG said Air India failed to control employee costs, reduce staff strength and rein interest costs. The airline has over 40,000 employees including those on contract with an annual wage bill of Rs 3,000 crore. The auditor has recommended curtailing operations on loss-making routes and their regular monitoring to maximise revenues. The employee costs should be controlled and incentives be linked to company's productivity, CAG recommended. It said the airline should stop all free upgrades on business and first class, including those for its employees.

4. Shyamal Majumdar: The Maharaja of mess
Gustav Baldauf’s resignation as Air India’s Chief Operating Officer was on expected lines. But the frivolity of the national carrier’s latest crisis was surprising even after discounting the sheer incompetence of successive managements and the way the civil aviation ministry has been handling Air India’s affairs.

Anyway, Baldauf’s days were numbered since two of his high-profile appointees had already been shown the door. The Austrian national only hastened the process by publicly criticising the Indian government for playing “too prominent a role in the airline”. Forget Air India; no CEO can survive if he criticises the “promoter” in his public or private conversation.
What seemed a joke, however, was the way the appointments were made in the first place. Even basic management books will tell you that no company should appoint four outsiders with fancy salaries when you are being forced to defer employees’ salaries. Air India did just that. Baldauf & co were appointed at salaries of over Rs 3 crore each at a time when Air India was losing Rs 20 crore a day and the employees of the debt-laden airline got delayed salaries for the seventh month in a row. That’s a sure recipe for an HR disaster — the “outsiders” were isolated from day one, with employees resenting their appointments and the owner (the government) expecting a turnaround magic from them “with cooperation of all concerned”.

A management consultant says it reminded him of a large company that once announced a shift of operations to a much smaller place in the suburbs owing to financial difficulties. That’s alright. But the announcement came on the day the MD arrived at the office in a new luxury sedan he was given as retention bonus!

The role of the board, which empowered Baldauf to make at least two hugely controversial senior appointments, is even more curious and raises questions about the entire recruitment process.

Here are the facts. Baldauf had recommended the hiring of Capt Pawan Arora as Chief Operating Officer of Air India Express and Stephen Sukumar as Chief Training Officer. Arora was a former executive of IndiGo, while Sukumar had come from Deutsche Lufthansa. Eyebrows were raised at their hiring, especially among the unions that demanded their ouster from day one in view of the company’s financial condition.

Although Air India says Chairman and Managing Director Arvind Jadhav went by Baldauf’s recommendation, the fact is that he and the board should have done some basic due diligence before giving such appointments the go-ahead. What makes the entire situation even more untenable is the subsequent revelation that the appointments were cleared despite objections raised by some board members.

In a decision that speaks volumes about its hazy role, the board sacked Arora only after it “learnt” that he had been removed from the Directorate General of Civil Aviation (DGCA) in which he had been seconded as Flight Operations Inspector from IndiGo. The DGCA’s decision was prompted by the findings that Arora was not qualified for the post. In fact, the DGCA had asked its Chief Flight Operations Inspector to explain the circumstances under which Arora was appointed a Flight Operations Inspector.

Even if one accepts the argument that Baldauf had a vested interest in recommending Arora, it’s strange how the airline’s CMD and the board, which comprises civil ministry officials, didn’t have the basic information about DGCA’s reservations.

Even in Sukumar’s (he has also resigned) case, the post of Chief Training Officer was not advertised by Air India.

Baldauf’s detractors say he deserved to be sacked since he was not able to do anything to turn the airline around even after almost a year in his job. To support this argument, they cite the DGCA data for domestic air traffic in January. Air India’s domestic wing had slipped to the fourth place. Jet, Kingfisher and IndiGo each flew more passengers than Air India, that too by a large margin. The DGCA’s figures also showed that Air India reported low occupancy and the lowest on-time figures.

But that’s a juvenile argument since it’s unrealistic to expect an external person to work his magic in just 10 months in an organisation that has been on its deathbed for long with a Rs 40,000 crore debt. Its promoters never allowed it to function as a commercial airline and as a public sector undertaking; it had to follow the regulations and writ of watchdog bodies that have failed to serve any fruitful purpose.

If Air India’s experiment with outside talent has proved to be short-lived (even some independent directors appointed recently want to quit), it’s clearly the fault of the aviation ministry and the board.

NEHA JAIN

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