Tuesday, July 12, 2016

Civil aviation minister reviews Air India’s performance; will Lohani be able to do a turnaround?

ON Monday, civil aviation minister Ashok Gajapathi Raju reviewed the functioning of the national carrier Air India and exhorted its officials to use best practices of information-technology to bring efficiency to the airline. Its CMD and 1980 batch Indian Railway Service of Mechanical Engineering (IRSME) officer — Ashwani Lohani gave a detailed presentation to the minister explaining its recent initiatives on…
augmenting its earnings and monetizing its existing avenues so as to reduce its hefty losses. The target is clearly making operational profits on a year-on-year basis, as wiping off Rs 28,000 crore losses accumulated over the years is a distant dream. The review is important because the new management under CMD Lohani will soon complete a year.
Last August, when Lohani was brought into this loss-making government-run airline, there was a lot of buzz in the media and in the corridors of power. First, it was an experimentation of appointing a rail officer to head the airline instead of an IAS officer, conventionally appointed as Air India CMD. Secondly, Lohani’s track-record as a turnaround man is well-known. As BoI had earlier written, he scripted the turnaround of India Tourism Development Corporation (ITDC) in the year 2002-3 (he was its CMD then) and then placed Madhya Pradesh tourism in the national landscape. The government had announced his appointment to head the national carrier last August. He then moved from Bhopal to New Delhi to take charge of the airline. As managing director of Madhya Pradesh Tourism Corporation, he was based out of Bhopal.
Has there been a change in Air India in the last one year?
Lohani in his presentation to the minister yesterday explained the initiatives taken recently and also various challenges that the airline was facing in the domestic and international market. A statement from the civil aviation ministry issued on Monday said that aspects on the performance of Air India in comparison with other domestic airlines and the industry as a whole were analyzed during the review meeting chaired by the minister. The other aspects discussed in the meeting were various strategies that could be taken up to improve existing parameters of the airline.
In the last reshuffle, Jayant Sinha who has a strong background in finance, was moved from the ministry of finance to civil aviation as the minister of state. But it's too early to know his role and contribution to improve the Air India's fortune. 
Only recently, Air India decided to lower its last minute ticket fares to the level of 2-tier AC of Rajdhani trains so as to woo more fliers and achieve higher seat occupancy, mainly in its trunk routes to begin with. According to this scheme, air fare will be dropped to the level of 2-tier AC of Rajdhani in four routes–Delhi-Mumbai, Delhi-Kolkata, Delhi-Chennai and Delhi-Bengaluru, just four hours before the departure of flights. So, wait-listed rail passengers will actually be able to fly in those routes and reach their destinations well in advance. Later, the scheme was extended to flights from Delhi to Ranchi, Ahmedabad, Hyderabad, Goa, Patna and Raipur too.
So, if you have a confirmed Rajdhani train 2-tier AC ticket for Delhi-Chennai you pay Rs 3,905. But if you have a wait-listed ticket and manage to convert it into a flight ticket at the last moment, you pay the same amount, i.e. Rs 3,905 and instead fly to Chennai. 
Lohani, a railway officer, clearly sees a potential of shifting high-end rail customers to Air India? But the question is — will this turnaround man make a big difference to Air India’s fortune, particularly when the airline bears the burden of an accumulated loss of whopping Rs 28,000 crore? 

1 comment:

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