Air India CMD Meets Cabinet Secretary, gets Bailout Promise


By Sanjay Singh

New Delhi, June 20 (IANS): The government has promised to do "everything" that is possible to save the country's flag carrier Air India, which is struggling hard to cope with a cash crunch, a senior airline official said Saturday.

This promise was made by Cabinet Secretary K.M. Chandrasekhar Saturday in a meeting with Air India's top brass, including its chairman and managing director Arvind Jadhav, the official, who did not wish to be named, told IANS.

"The government now is taking us seriously and looking into our demands. We have been assured that the government would do everything to save the airline from the crisis," he said.

The airline management would meet T.K.A. Nair, principal secretary at the Prime Minister's Office, Wednesday for further discussions.

Civil Aviation Secretary M. Madhavan Nambiar was also present at Saturday's meeting.

When contacted, an Air India spokesperson refused to share any details.

Asked whether the airline officials met the cabinet secretary, he said: "I will neither admit nor deny this."

The Air India chairman has been camping in the capital for the last two days.

Another airline official, on condition of anonymity, told IANS that the U-turn in the government's stand shows that Air India's "pressure tactics" have succeeded.

National Aviation Co India Ltd, which owns Air India, had earlier announced that it would delay the June salaries of its employees by 15 days.

It also asked its top management to voluntarily forego one-month salary and productivity linked incentives.

The employees responded angrily to the management's decision and threatened to go on an indefinite strike from July 1 if the airline delayed their salaries.

This, according to the official, put the government under pressure to act swiftly.

However, airline officials said they still did not expect any major bailout announcement from the government.

"There is nothing big coming out for us in the next budget. Even if we are given funds, that would not be of much help for us in the long run," said a senior airline official.

Earlier in the day, in a letter to Air India employees, Jadhav said interest rates on loans from financial institutions were very high and the airline cannot avail loans endlessly to meet its working capital requirements.

Air India plans to raise Rs.5,000 crore in equity capital, Rs.7,000 crore as a five-year soft loan and a special grant of Rs.2,000 crore.

Air India incurred losses of over Rs.4,000 crore last fiscal.

  

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Comment on this article

  • M. Mathias, Beliz/India

    Sun, Jun 21 2009

    Air india is Government Airline and belong to every Citizen. Majority Indians are poor and So Govenment must not spend poor persons money to bailout Air india. Goverment should sell Air India back to Tata group Who started and previously owned Air India or other Businessman like Vijay malya and tax the business and from the tax money goverment should help the millions of indian poor.Ministers and Govement employees who fly free on Air India must be billed by private Airlines. Developed countries goverment does not own Airlines.Why a poor country like India should have a Airline?

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  • A.S.Mathew, U.S.A.

    Mon, Jun 22 2009

    Mr. Arun CK has presented all the facts very plainly. If the AI manangement is trying to have more IAS officers to rectify the problem, it will never work. The IAS officers are very smart people: the problem with AI is not the lack of administration, but the lack of passenger trust. Who can solve this fundamentally serious and cardinal problem? I flew AI for the first time in January 1971.

    Even though I was an economy passenger, we got excellent service. Almost 99% of the passengers were dressed in full-suit at that time. As the number of airline passengers began to increase, the service of many international airlines began to deteriorate, but the quality of service in airlines like AI began to tumble every day.

    Since AI had a monopoly in service to the western hemisphere with the least change of planes, passengers began to lean on AI excessively, espcially the older generations. AI employees took this windfall as an eternal treasure, so they got arrogant and delivered less friendly service to the passengers at times, very rude. The passengers began to get rude too, and it became a pattern to have friction in every flight. I do remember my last flight via AI because I could''t get a seat in any airlines. To get a free voucher to stay in a hotel in Bombay, it was a long queue to get the voucher. The AI employee left her chair more than four times, and the irritated passengers fought with the emplyee. Then getting a free transportation to the hotel was worse than catching a city bus in Calcutta.

    We were packed like dead fish, and the passengers began to fight in the bus. So, flying by AI was like attending shareholders meeting of a bankrupt corporation. The passengers began to leave AI, one at a time. With all the new planes, even the Indian origin people are not attracted to AI. It takes a massive public relation coup to change the bad fortune of AI, and to rescue it from oblivion. Air India has to hire people from other airlines as consultant, to train the employees, how to handle and serve the passengers because if the passengers are gone to other airlines, they will be in the street looking for a job.

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  • Arun CK, DXB MLORE

    Sun, Jun 21 2009

    When you have a pathetic onboard and off board service, consistent in not being punctual, over last many years and treating our own citizens as third class as if you do not belong to India like what other international carriers , Looting directly through rates or indirectly through luggage issues by laying monopoly factor some one’s curse had to hit AI one day. What was AI once upon a time and what is it now just because AI wanted to be the same and dint adapt the changing times.

    AI was always the preferred in terms of Royal treatment for its travellers once upon a time may be 15 years back. It was the first to airlift people affected in gulf war for free. But when you look at it today they still have many of those same old flights, for a frequent traveller he will not be surprised if he remembers a face he saw may be 2 years back doing the same job. Massive corruption, and non-adaptation of itself to changing times or competitive market is another cause for its state today. It tried to expand by introducing budget carriers 3 years back but just took the interest of its passengers for granted but looking at only commercial point of view what we in business terms call as profit maximisation. Less time more profit, the result is beg for bail out.

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