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Ways to Resurrect Air India

Air India is assured of budgetary support of a sum Rs 30,000 crore in a phased manner until 2021

Amresh Srivastava
Publish Date: May 12 2016 1:22PM | Updated Date: May 12 2016 5:32PM

Ways to Resurrect Air India

 Air India is assured of budgetary support of a sum Rs 30,000 crore in a phased manner until 2021. This can be spent on its expansion upkeep and running. The fund is supposed to be judiciously spent in a planned manner. The new aviation policy which the Government is likely to announce in May 2016 must have a clear strategy as to how the taxpayers’ money will be utilised to get the operations of Air India financially viable. A major part of the Aviation Ministry’s yearly budget to the tune of approximately Rs 6000 crore for 2016-17 goes towards keeping Air India up and running.

 
Dynamic leadership
 
Until now the Civil Aviation Ministry was restricted to cost cutting for the revamp of Air India (AI). The airline should be headed under a dynamic leadership. The Head of the airline should think out of the box. The role of leader plays a very crucial role in the public sector. It should be capable enough to convince employees for turnaround of the organisation. The freedom and accountability of the leadership must be fixed. The present chairman of the airlines Ashwini Lohani, known as tourism hand, has many achievements in Indian Railways. With high hopes, the Government has appointed him as the chairman and managing director of Air India. Before him, Rohit Nandan was head of the AI for three-and-a-half years and was credited with getting Air India to post an operational profit for the first time after the erstwhile Air India and Indian Airlines merged in 2007.  Also, Air India finally entered prestigious airline grouping Star Alliance during Nandan's tenure after several botched attempts earlier.

Steep cut in losses
 
Three out of 120-odd international routes all short hauls flown by Air India make money. This is what Mahesh Sharma, the Minister of State for Civil Aviation, told Parliament soon after taking over in 2014.The experience says that most of the long haul international flights are loss making for AI.

Withdrawal from international routes
 
The Air India (AI) should gradually pull itself out from the long international routes with the aim to connect to nearby countries of south east Asia, Gulf and back home, the remote cities and towns. Instead of operating on loss making routes, the Air India should be converted into a strong regional carrier for the country. By doing so the Government may realize its long cherished dream to develop remote connectivity. 
 
Free the private players
 
The private airlines should be freed from the obligation to fulfil the remote connectivity guidelines. There is no point in forcing the Tata’s Vistara airlines with a business and premium economy class to fly to Kohima where its premium seats will remain vacant. Reality of the day is that the it is tough task for airlines to fill business class seats even on Delhi-Mumbai route which is considered to be premium route in the aviation sector. “By freeing up bilateral rights, Air India's withdrawal can make way for some of the private sector players to step in and perhaps build a strong private international carrier out of India -- something Air India has failed to do in 50 years,” says Anjuli Bhargav ,an aviation expert.

Privatisation not an option
 
Privatisation of Air India is not an option before the Government. Keeping in view the jobs of some 30,000 employees, the shutting down cannot be an option. The Government must consider converting Air India into a strong regional carrier, leaving metro cities connectivity to private airlines. The domestic connectivity can meliorate and fetch with it all kinds of multiplier benefits to the economy.
 
Leasing out aircraft
 
Leasing out wide-bodied aircraft could be a way to earn money for the Air India. The AI should continue the emergency operations like earthquake relief (like the one in Nepal), rescuing Indians from odd circumstances as it rescued hundreds of Indians from embattled Syria and meet other social obligations like Haj pilgrimages.

End privileges
 
Free tickets incentives for staff and employees to foreign destinations should be stopped immediately. The provision of upgrading and smaller privileges the staff and bureaucrats have invented over the years must be scrapped.
 
Vacate expensive spaces
 
By vacating the costly real estates at various locations around the world such as Heathrow, Narita (Japan) and elsewhere also can save money once the AI withdraws its international flights.
 
Air India Joins Star Alliance
 
Founded in May 1997, Star Alliance is the world's largest global airline alliance with its headquarters is in Frankfurt, Germany. It is the largest global alliance by passenger count with 641.10 million, ahead of SkyTeam (588 million) and Oneworld (512.8 million). Its slogan is "The Way The Earth Connects". Its current CEO is Mark Schwab.  
 
On 14 May 1997, an agreement was inked to form Star Alliance by five airlines spread over three continents: Scandinavian Airlines, Thai Airways International, Air Canada, Lufthansa, and United Airlines. The alliance chose Young & Rubicam for advertising, with a budget of $25 million (€18 million). The airlines shared the star logo from the beginning, with its five points signifying the five founding air carriers. The alliance adopted its motto, "The Airline Network for Earth" with the stated goal of making "an alliance that will take passengers to every major city on earth".   
 
Star Alliance's 28 member airlines operate a fleet of about 4,000 aircraft, serve from more than 1,330 airports in 192 countries and carry 637.6 million passengers a year on more than 18,500 daily departures. The alliance has a two-tier rewards programme, Silver and Gold, with incentives including priority boarding and upgrades. Like other airline alliances, Star Alliance airlines share airport terminals (known as co-location) and many member planes sport the alliance's livery.  
 
Air India got its Star Alliance membership in July 2014. The State-owned carrier’s decision to join it has benefited the airlines a lot. According to Pankaj Srivastava, the commercial director of Air India, partner airlines have brought in a lot of benefits. Of the airlines in the alliance, 16-17 operate through destinations across India though through Mumbai and Delhi from where travelers arriving by partner airlines are flown to other cities on the domestic circuit of Air India. “AI gets the opportunity of flying these passengers to different destinations in India (via what is termed code sharing). It makes commercial sense,” said Srivastava