New Delhi: The Center for Asia Pacific Aviation on May 23 said there is a high likelihood of Air India — the country’s national carrier — being shut down due to human resources problems at the airline and the management not taking responsibility. In a hard-hitting report, CAPA said that Air India is set to enter a defining period as likely management changes loom ahead. Here are the top 10 takeaways from the report.
The national carrier is operating on an unviable business model. It continues to stay in the air because it is being funded by taxpayers money.
l The airline is entering a defining period. The human resources integration following the merger of the erstwhile Indian Airlines with Air India has been handled badly, the report said. It adds that this issues has been almost deliberately ignored, with nobody in senior management or government taking responsibility.
l With no strategy of its own, the report says the government now has no option but accept the proposals of the Justice Dharmadhikari report, whose recommendations are yet to be made public.
l According to CAPA, the outcomes will meet with a mixed response from the unions and more strikes are likely. The government, it says, seems to be preparing to adopt a firm stance, limiting discussions with the unions.
l It may not even shy away from a watershed moment in the next two to three months after the report is accepted by the government. This moment, the report says, could include a temporary shutdown of the airline.
l Another key concern is that the management at Air India could be set for change at the most senior levels, including the position of chairman and managing director. The new team could be faced with a highly charged and complex situation.
l The Air India board has also not been strengthened following a couple of high profile non-executive departures last year. Within the government, too, there could be new appointments in a number of senior roles.
l The report points out that there is nobody taking ownership of the turnaround plan for Air India. At the same time, the plan itself is unrealistic and unachievable without first resolving the personnel issues emerging from the merger of the two carriers.
l CAPA once again recommends that Air India should be placed in special administration, similar to that adopted for Satyam, if any meaningful progress is to be achieved. This would involve bringing in technocrats and experts to run the airline, external accountants and auditors, and a government-brokered panel to oversee the transition.
l The pre-occupation with Air India has also hurt the Ministry of Civil Aviation. Because of the Air India crisis, the Ministry has fewer resources to focus on industry issues. As a result, the policy and regulatory framework is weak and misaligned with industry requirements.