PMO against IC AI merger. - Airliners-India

Nimish · Member

RE: PMO against IC AI merger.

karatecatman · Member

Cougar,

The 12 grounded A320 issue was clearly a mess. IA clearly bungled and allowed dues to mount, which is why IAE withheld supplying the spares.

The issue figured in Parliament also and it was only after the Parliamentaay Committee on Aviation expressed concern that PP took the first steps towards prodding IA into doing something. Remember IA is a PSU and pandemonium in Parliament is what moves things, especially when Nilotpal Basu becomes hyperactive.

karatecatman · Member

Management style:

In the case of Air India, there have been the occasional flashes of brilliance. But largely, it has been the one-man-one brand as in the case of Raghu Raj, Rajan Jetley. It's a different matter though that Jetley was one man who saw red and perhaps correctly and went about hammering things down eve at the cost of enragng Air India's largely Oxbridge top brass.
Pilot strike? Was quick enought to let the public know what the demnds where all about and got adequate publicity.
Image problem? Punctuality? Appointed a separate department to look into time keeping. And then released large ads every week, with a time meter. Soon the public saw 60% ontime was slowly creeping up to 94%
The series of ad campaigns on TV and in print were also frank enough to tackle the negative aspects of Air India's image. Bold experiment that did work to an extent.
Jetley's success was his hands on style and confident approach. Also didn;t hesitate to dish out the moolah to the engineering staff to ensure aircraft availability. He even did the unthinkable --- of identity change. But when there was that huge uproar, it also hastened his departure and his disillusionment with running a PSU. Finally, too talented a man to stay put in one place.
Then there was Y.C Deveshwar, the result of the GOI's private sector-running-a-PSU experiment. His game was partly up when he declared that spectacular 333 cr. profit, largely 'cause of it being the sales proceeds of 2 747-200s.
Russi Mody was too arrogant. Was mainly interested in talking about his Tata Steel days and the wine list.

The common link in all this is that every Air India manager listed here, always talked of how IA was the better airline. Russi Mody, in particular, said it was to his pleasant surprise that IA would survive while AI would be on crutches.

AI's assets are its crew also. Don;t forget its list of spectacular cabin crew --- of past ( Maureen Wadia, Parameshwar Godrej, Radha Seth, Vandana Mohan, Karen Lunel) , and present --- Upneet Pannu, Sunita Sodhi, Odette Norhonha, Karen Koshy, Rajee Balse, Colleen Hai, Radhika Gokarn, Radhika Sharma to name just a few. And now there's the Miss India brigade starting with Hufriya Bhiwandiwalla, Kaveri Jha, Aparna Sharma, Pooja Arora, Nayaa Singh and Priyanka Jha
One of AI's strategies of highlighting the JRD Tata days witht the advent of the 777s will be to start personality/indivdual focussed campaigns. So expect these names to become familiar to most of us.

Conclusion: AI suffers a lack of continuity, interference especially with fleet planning starting from the days of Capt. Dhubhra Bose. Was brave enought to start the A310 deal. But things should change with the new fleet and recognition that it fight back or perish. New experiments like Air India Express and full Government backing for fleet renewal have been a help. Jetley, for example, lamented how he just couldn;t even raise the subject of a reliable fleet. Haven;t things changed since then? Fleet renewal has of course been a touchy subject especially with the issue of kickbacks. The IA Airbus deal being one.
Air India also knows that it can't live off the bilaterals.
Brand manager Alia should help work things out to an extent.
We need to give Thulasis a chance. To early to write off AI. Be patient.

****
IA too has had a largely One-man show. The initial government appointees Admiral L. Ramdas and L. Vasudev (a close relative of mine) couldn't tackle the pilot mafia and their government benefactor. In face Vasudev was cornered on this and quit in disgust when the pilots ganged up on him. GOI also let him dowm badly, like in the case of Ramdas.
Madhav Rao Scindia, had to just wring his hands in despair.
But IA;s golden days started with the IAS brigade. Probir Sen, who came at a time when IA was really bad, successfully turned things around with his aggressive marketing. But still couldn;t scare the Government into fleet renewal.
Strategies of removing the ticket cancellation surcharge, and initiating some of the marketing schemes that exist today are his idea.
Sunil Arora is another IA golden boy. Initiated management programmes for all staff and went about enhancing frontline staff skills. That IA's cabin crew are better than they were is largely due to him, the result of getting the likes of All India Radio for speech training, Shehnaz Hussain, Sabira Merchant and Vandana Luthra (controversial) to help in grooming and soft skills and stepping up the marketing with the help of IIM-Calcutta.
Arora's biggest help was acting CMD Sushma Chawla, one of the airline industry's assets.
Trivedi, the latest, is a fast learner, but drawback seems to be his very low profile marketing skills. More comfortable with finance and balance sheets as he has specialised in this while in the Ivy League.
What helped IA to a large extent to fight back Jet, Damania and Sahara, was its equally aggressive marketing strategies. This is what is lacking now.
Conclusion: IA's team is essentially sound. Perhaps needs motivation.

Problem in both airlines lies in not being able to pull the entire workforce along.

karatecatman · Member

Since IA's marketing department is sound, here is one more example:

IA has always cribbed about flying Tier 3 routes. And the strategy is fight back is here:

Source in IA has provided this:

Invitation of Offers from domestic airlines for Purchase of Surplus ASKMs in Category II, IIA and III routes available with Indian Airlines.

Indian Airlines Ltd. together with its subsidiary, “Alliance Air” is operating its schedule air transport services, inter-alias, in terms of the Policy and has surplus availability of ASKMs in Cat II, IIA & III routes.

IA invites sealed offers from domestic airlines engaged in the business of schedule air transport services with the approvals granted to them by the concerned authorities for purchase of surplus ASKMs in Category II, IIA and III routes available with Indian Airlines from time to time on the following terms and conditions:

Indicative surplus of ASKMs that is likely to be available with Indian Airlines for sale under the Policy during the next 6 months from October’2006 to March’2007.

Category  ASKMs likely to be available per month
(Million)
III        100
II          20
IIA            1

The sale of surplus ASKMs shall not confer on the purchaser airline (s) any right, other than to use the purchased ASKMs from IA to discharge its obligations under the Policy. The purchaser airline (s) shall have no right to further allocate / assign / sell / transfer or encumber, in any manner whatsoever, such sold ASKMs, without the prior written approval of IAL.
(iii) The revenue earnings and the operating cost of flights generating these surplus ASKMs shall accrue to / be borne by IAL

***

Alliance Air is interested in lease-in of six ATR 42 in 48-seat configuration on Dry Lease basis for a period of Five years extendable to Seven years. The deliveries of aircraft to be effective during December, 2006 onwards..

Bidders can also submit separate offers in addition to the Aircraft bids, for upto Nineteen (19) Pilots as line Captains.

Alliance Air is presently operating four ATR 42-320 aircraft on lease. Six more ATR 42 aircraft are required to be taken on lease.

The annual utilization would be approx. 2500 Block Hours / aircraft per annum.

tayara mechanici · Member

karatecatman wrote:

Problem in both airlines lies in not being able to pull the entire workforce along.

The simple fact is that you cannot run a service industry under govt ownership, the GOI has exited out of HCI (Hotel corp India) knowing this fact fully well however the Airline business offers prospects for largescale dubious deals and then there is no dearth of these born again mavericks that these political leaders like to thrust on the state airlines as their saviours.

I think you've given undue credit to Rajan Jetley, he was a nominee of Jagdish Tytler and both were hand in glove crooks. I worked for AI under RJ / JT regime, one of the biggest scandals during that period was the purchase of B747-200 reg VT-ENQ from SQ. The AI Engg Director Mr Bhagat, had rejected the aircraft for it poor maint and history of faults. JT forced him to sign on the a/c survey report, which he did only after JT had made a noting to say under the directions of the MoCA. This a/c was worse than the present VT-AIM and was later sold. AI had payed close to $30m for it and spent the same amount to maintain it to airworthy.

AIs last acting MD Mr Gogoi was more effective in reigning in the Pilots and AME unions than any of the CMDs before and his policies helped AI expand to/on many sectors.

JumboJet · Member

tayara mechanici wrote:

karatecatman wrote:

Problem in both airlines lies in not being able to pull the entire workforce along.

The simple fact is that you cannot run a service industry under govt ownership, the GOI has exited out of HCI (Hotel corp India) knowing this fact fully well however the Airline business offers prospects for largescale dubious deals and then there is no dearth of these born again mavericks that these political leaders like to thrust on the state airlines as their saviours.

I think you've given undue credit to Rajan Jetley, he was a nominee of Jagdish Tytler and both were hand in glove crooks. I worked for AI under RJ / JT regime, one of the biggest scandals during that period was the purchase of B747-200 reg VT-ENQ from SQ. The AI Engg Director Mr Bhagat, had rejected the aircraft for it poor maint and history of faults. JT forced him to sign on the a/c survey report, which he did only after JT had made a noting to say under the directions of the MoCA. This a/c was worse than the present VT-AIM and was later sold. AI had payed close to $30m for it and spent the same amount to maintain it to airworthy.

AIs last acting MD Mr Gogoi was more effective in reigning in the Pilots and AME unions than any of the CMDs before and his policies helped AI expand to/on many sectors.

Yes, some aweful memories.

Scamster Rajan Jetley.

The joker made a public humiliation along with global laughter for our airline. Remember the Saggitarian to the Sun Livery.

He made money and not to forget his nemisis. From visiting cards to the plane livery everything was changed. So imagine the kickback.

If i am not mistaken there were 3 aircrafts that were done up in the Sun logo livery.

If im not wrong, we even had a case/out of court settlement to pay the japanese for playing around with the sun.........

Nimish · Member

All these are excellent reason to merge and then privatize the 2 carriers!

Another example of the great synergies between AI/IC - IC957 BLR-SIN daily; but AI does not code share or sell any seats on that flight! It would be great if AI would code share, since that could tie in with the further code shares AI has with SQ on SIN-SFO and SIN-LAX sectors. But no, AI/IC see no reason to code share on this flight, and so AI is happily selling seats on SQ on this sector, but not on IC!

COUGAR · Member

There are some routes that AI thinks should be its exclusive preserve: SIN being among them.

Ironically AI has no problem with foreign carriers or even pvt carriers on the asme route but has problems with IC operating them!! Perhaps they know that the differences will be all the more glaring!!

Nimish · Member

COUGAR wrote:

There are some routes that AI thinks should be its exclusive preserve: SIN being among them.

Cougar - what you're saying is obviously wrong since IC does operate flights to SIN, from BLR, MAA etc. and have been operating these flights for ages.

I cannot see how AI can have any issues with IC operating that sector - please provide some details on why you believe it's the case.

the_380 · Member

Nimish wrote:

COUGAR wrote:

There are some routes that AI thinks should be its exclusive preserve: SIN being among them.

Cougar - what you're saying is obviously wrong since IC does operate flights to SIN, from BLR, MAA etc. and have been operating these flights for ages.

I cannot see how AI can have any issues with IC operating that sector - please provide some details on why you believe it's the case.

IC does operate MAA-SIN-MAA sector sometimes its a A300 otherwise its a A320

COUGAR · Member

What i said was that AI has never accepted/reconciled to IC operating on some routes, SIN and Middle east included.

When CCJ-Gulf was being opened to IC, AI threw a hissy fit and even operated an A310 on a proving flight to show the then Civil Av min that AI's widebodies could be operated to CCJ (it then had a short runway). Basically it stemmed from opposition to IC operating the routes that it considers its sole preserve.

It has never fully accepted IC operating internationally and wold prefer relegatin it to a status that existed in the 80's: that of a second rung carier.

Which explains why they will code-share with EVERYBODY but IC!!

the_380 · Member

COUGAR wrote:

What i said was that AI has never accepted/reconciled to IC operating on some routes, SIN and Middle east included.

When CCJ-Gulf was being opened to IC, AI threw a hissy fit and even operated an A310 on a proving flight to show the then Civil Av min that AI's widebodies could be operated to CCJ (it then had a short runway). Basically it stemmed from opposition to IC operating the routes that it considers its sole preserve.

It has never fully accepted IC operating internationally and wold prefer relegatin it to a status that existed in the 80's: that of a second rung carier.

Which explains why they will code-share with EVERYBODY but IC!!

I totally agree with the point that AI has never approved IC operating intl flights....made life harder for them

Nimish · Member

Won't a merger eventually do away with 2 flight series (AI vs. IC) and ensure everything is one series only (whether AI or IC)? Isn't that the whole purpose of the merger - to drive both to work together, "synergize", coordinate schedules, share resources, benefit from a bigger scale of operation etc. etc.

So why did you say you oppose the merger?

the_380 · Member

Was the question directed to me?????

If yes here is the answer.

I donot oppose the merger but support it. But the reality is something else what we do not want. A merger is practically impossible and both the managements oppose it they will never approve it.

Second as i have already stated in this thread before about the AME Pilots Crews and other staff problems that both airlines will face. None approve the other. IC wud want AI to do domestic a\but AI wont do that and they dont want to do domestic.

If only a merger at a management level takes place and only FFP is combined then what merger wud u call that?

If at all any thing takes place the main reason is to strengthen both the airlines' IPOs.

COUGAR · Member

A merger has no benefit to IC or the govt.

There can be NO QUESTION of mergin a profit making IC into a loss making poorly managed airline like AI. Thats a lose-lose situation. The point is not to save Air India which can go to hell. The point is to further the cause of Indian Civil Aviation and benefit passengers.

The Govt in its infinite wisdom believes that it needs to have a continuing stake, even if partial in the airline business. A 49% stake in IC can help the govt achieve its goals of providing assured domestic connectivity to every corner, with intl ops subsidising low yield domestic runs. Private carriers and indeed IC itself can handle international ops pretty nicely.

IMO, AI should be just allowed to die a natural death. AI is virtually a clone of the old Pan-Am with all the similar problems. PA died a natural death and nobody lost anything! I dont see why AI should be any different!!

tayara mechanici · Member

COUGAR wrote:

A merger has no benefit to IC or the govt.

There can be NO QUESTION of mergin a profit making IC into a loss making poorly managed airline like AI. Thats a lose-lose situation. The point is not to save Air India which can go to hell. The point is to further the cause of Indian Civil Aviation and benefit passengers.

The Govt in its infinite wisdom believes that it needs to have a continuing stake, even if partial in the airline business. A 49% stake in IC can help the govt achieve its goals of providing assured domestic connectivity to every corner, with intl ops subsidising low yield domestic runs. Private carriers and indeed IC itself can handle international ops pretty nicely.

IMO, AI should be just allowed to die a natural death. AI is virtually a clone of the old Pan-Am with all the similar problems. PA died a natural death and nobody lost anything! I dont see why AI should be any different!!

AI was a PVT airline run by the TATAs and nationalised under the Janta Party rule in 1977. IA was an amalgamation of various state and pvt airlines nationalised in 1950s. AI atleast had a intl standing pre-1977, something which IA couldn't achieve inspite of having the whole dom sector to itself for nearly 40yrs. IA was tagged flying coffins in the 80s & 90s, ironically this was one of the reasons for allowing pvt airlines back in the dom sector.

My suggestion is to auction both seperately or together, let the govt get the ---- out of this business - completely, they cannot have a conflict of interests where the GOI is regulator cum investor/competitor. Let the entity taking over install its management from those present within these 2, if worthy. High time they learnt to walk without crutches and prove themselves.

karatecatman · Member

www.uninews.com
Indian Airlines on the lookout for ad agencies
MUMBAI, September 26 (UNI)

Indian Airlines is on the lookout for full service ad agencies for its recently renamed airline brand, Indian. It currently has four agencies on its panel – RK Swamy/BBDO, Adfactors Advertising, Bates Enterprise and Mode Advertising. It is learnt that these four too, have pitched to retain the business. Since the two-year contract with these agencies is about to expire, the airline major has invited agencies to participate in the pitch. The company is open to applications from ad agencies till September 30, 2006.

Indian Airlines is planning an ad spend upwards of Rs 20 crore for the coming year, as per sources close to the situation.

If this is an indication, what is this merger? IA is planning to highlight its identity for one whole year ahead!!!!

As Nimish was saying, isn;t a merger also about one identity? Everyday each party involved issues conflicting statements and the press leaks only add to the mess.

A merger is fine if the work force is lean and mean, but when there are a hundred preconditions and the Left imposes a million conditions and the unions make it clear that one bad step will invite severe industrial action, merger is just nonsense. The aim of making one Indian airline "to take on British Airways and Lufthansa, and Singapore Airlines" will just be a joke. Especially when you can;t shed jobs. and the only reason why the Left is supporting the move.

Or the merger should be like in the case of Sri Lankan and Emirates. Of a strategic partner who will be more professional.

If this merger is to come about only if the GOI ensures industrial peace first, it is not a good idea at all. What will happen next? Assure employees that that can continue to travel F and J? Then why did the managements go through this elaborate cabin upgradation exercise if it is only to be used by airline employees? And why talk of bringing back part glory when premium employess will only be your own employees. This may not actually happen, but is something that can;t be ruled out.

Can;t imagine the two airline employees agrresing to surrender their privileges.

tayara mechanici · Member

karatecatman wrote:

Or the merger should be like in the case of Sri Lankan and Emirates. Of a strategic partner who will be more professional.

Can;t imagine the two airline employees agrresing to surrender their privileges.

The EK -AL deal where EK got management control of AL was an absolutely shamefull deed for any countries morale. The first action of EK after paying $40m for the control of AL was to order 9 A330s. A discount of $5m per a/c adds up to $45m. EK had made a profit from day 1. Foll this deal AL lost many core employees disgusted with Chandrika.

The employees of AI / IA are not living in a vaccum, they are fully aware and experiencing the paradigm shift taking place within Indian Aviation and Economy. It is for the GOI to have a will to privatise these entities, the communist in India for all practical purposes are only in the name, they believe in progressive socialism, the mantra of Congress. Hence buddha deb chases salim group in Malaysia and VSA is ready to talk to Dubai Internet city, the issue that got him to power.

As long as the minister and MPs can milk these airlines and vested interests like Naresh Goyal keep away serious investors from these airlines, we'll continue expressing our opinion here. Cougar you can carry on repeating.......by the way cougar what were saying.

-- Edited by tayara mechanici at 07:03, 2006-09-27

VOTV · Member

It is for the GOI to have a will to privatise these entities, the communist in India for all practical purposes are only in the name, they believe in progressive socialism, the mantra of Congress. Hence buddha deb chases salim group in Malaysia and VS is ready to talk to Dubai Internet city, the issue that got him to power.
VS you mean the CM and not Virgin, guys may not be familar with that term. Those are the only two communist CM's of India, I believe.

-- Edited by VOTV at 05:46, 2006-09-27

tayara mechanici · Member

VOTV wrote:

VS you mean the CM and not Virgin, guys may not be familar with that term. Those are the only two communist CM's of India, I believe.

-- Edited by VOTV at 05:46, 2006-09-27

There you go.i've edited it to VSA. We southies have names too long to be accomodated on present online forms (20characters only)