Flying off the handle
The combined Air India can now teach management lessons on how not to fly anywhere. And woe betide its ‘much valued’ passengers, writes R Krishnan.india Updated: Nov 29, 2007 18:29 IST
During the heydays of non-alignment, Air India put up a huge hoarding in Bombay and Delhi boldly proclaiming: “From Lusaka to Osaka, the most non-maligned airline.” Today, if a similar hoarding is to be put up, it should read, “From Lusaka to Osaka, the most maligned airline.” Sticking to the subject of hoardings, a few years ago, driving down from Heathrow Airport to London, one could see a billboard advertising a leading financial that stated, “Let’s get the facts first. We will distort them later.” If Air India were to use this space today, it should say: “Let’s get the aircraft first. We will fly them later.”
The more Air India has tried to change, the more it has remained the same. Six international flights of the national carrier were delayed inordinately last week, some even cancelled because of ‘technical hitches’ and pilot shortage triggered by flight duty time restrictions. Air India flights to London, New York, Birmingham, Toronto, Dubai, Bangkok, Muscat and Tokyo were delayed by 17 to 24 hours. Instead of informing the truth to stranded passengers and extend a caring hand, the airline’s ground staff just vanished leaving harried passengers to fret and fume.
One may allow for technical snags and Directorate General of Civil Aviation (DGCA)-mandated flight duty time restrictions. But what seems unpardonable is the callousness of Air India’s staff. It is not for the nodal Ministry of Civil Aviation to fix this problem. It has to be done in-house. In the old ‘no competition’ days, Air India pilots, cabin crews, engineers and ground staff held the airline to ransom and often went on unannounced strikes. Today, when competition is killing even the best airlines, the airline seems to be getting nostalgic for the ‘bad old’ days. Why? Because after the merger with Indian (the old Indian Airlines), the National Aviation Company of India Limited (NACIL) has chosen brand Air India, thus making the Maharaja accountable (read: lay the blame ) for everything, and not for the wrong reasons.
Air India currently operates over 30 wide-body aircraft and 14 narrow-body Boeing 737-800s for its low-cost carrier arm Air India Express. It also has on wet lease one Boeing 767-300 and one Boeing 757. Air India signed a deal with Boeing to acquire 68 aircraft valued at Rs 35,000 crore in January 2006. Deliveries (few have actually arrived) were to be made between end-2006 and 2011. It very well knew the number of pilots it would require progressively to operate this fleet. Though 70 per cent of these aircraft would go in for replacement of the existing fleet and 30 per cent for additional capacity, Air India failed to arrange for pilots in time. Today, the airline has 777 pilots (117 expat pilots) and faces a shortage of 200 pilots. The shortage has become so critical that at least two of the brand new Boeing 777-300 ERs it acquired last month are grounded in Mumbai because there is no one to fly them.
Indian has 715 pilots including commanders to operate a fleet of 74 aircraft, out of which the 11 Boeing 737-200s are grounded. At least, five Boeings are being transferred to the cargo delivery company Gati and one to India Post. Effectively, Indian should be using just over 60 aircraft.
Indian also finalised its purchase deal for buying 43 Airbus aircraft valued at Rs 20,000 crore comprising 19 A-319s, 20 A-321s and four A-320s between late 2006 and 2011. Since Indian mostly flies on short sectors, compared to the ‘long-hauling’ Air India, the flight duty time restrictions allowed it to utilise the aircraft for between three to four take-offs and landings by its pilots. Ultimately, when all its new aircraft join the fleet, it will also have nearly 70 per cent for replacement and 30 per cent as additions.
There is a shortage of pilots throughout the world. In 2007, there should have been 15,000 new hires to replace approximately 12,000 retirements. The additional pilots are meant to operate new fleets. India and China are contributing to the demand. China is currently producing 1,500 pilots annually as against India’s 40 for domestic purposes. New flight academies planned in India will take up to two years to function. Even the new simulators being installed by Air India and Indian will be available largely for conversion — not for producing fresh pilots who will require about four to five years of flying before getting ready for jobs in the State-owned carrier or other airlines. But India cannot see itself in isolation. Major carriers like Singapore Airlines, Emirates, Qantas, Cathay and British Airways are also expanding at a terrific pace after placing orders for wide-body Boeings and Airbuses in the last two years. They will also need expat pilots.
So where will Air India find its pilots? Once the merger of Air India and Indian is complete and the already ordered new fleet join, the new Air India will have 130 aircraft by 2011. Since the Maharaja feels this will not be adequate and with the Ministry of Civil Aviation also prodding it on, Air India has begun a new exercise to buy another 100 narrow and wide-body aircraft. There is serious talk of Air India buying a new version of the Jumbo Boeing 747-8 or the Super Jumbo Airbus A 380 to replace its six Boeing 747-400s passenger aircraft that will be converted into freighters.
When Air India signed to buy 68 aircraft, it kept out both the Boeing 747-8 and A-380s as it felt it would not be able to fill them. Its 250-seater Boeing 777-200 LR flying Mumbai-New York non-stop has not been able to get a load factor of more than 47 per cent when it was launched on July 31. With the start of high season from mid-October 2007 and lasting up to January 2008 (an annual phenomenon), loads on Boeing 777-200 LRs have reportedly gone up to 70 per cent. The question is: how will it fill the 475-500 seater Boeing 747-8, or the 555-seater three class configured luxurious A-380 Super Jumbo?
Airlines are supposed to make money; not acquire aircraft just for fancy. Even if Air India buys a dozen big birds and the rest are medium capacity long-range aircraft (like the Boeing 777s or 787s and the Airbus A-330 or A 350s), besides the narrow body Boeing 737-800s or Airbus A-320s, the pilot shortage will constrain it very heavily.
The staff of the unmerged Air India got full arrears that have run into hundreds of crores. The Indian staff is yet to receive arrears. A new wage deal for the combined entity is due from January 1, 2008. While the costs are rising, productivity is not. Air India wants to buy fancy planes to keep them on ground as it has done with a few new ones. How it will service the huge capex of Rs 55,000 crore for purchasing 111 new aircraft and to meet depreciation and interest outgo at a time when yields are not rising and the US economy faces a recession is anybody’s guess. The airline, which reportedly made a loss of approximately Rs 700 crore in 2006-07, may end up in 2007-08 with a loss of about Rs 900 crore. Even the sale-lease back of six old A 310s in March 2007 did not help.
The combined Air India can now teach management lessons on how not to fly anywhere. And woe betide its ‘much valued’ passengers.
R Krishnan is a Delhi-based journalist and aviation expert