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Insurance Article

CAPA's Report Fuels Speculations of the Shutting Down of Air India

June 04 2012

The Centre for Asia Pacific Aviation (CAPA) seems to be not too happy with the Air India administration and governance. Voicing its displeasure CAPA cited how the state-run carrier is almost at its last run, and the likelihood of the airline shutting down in lieu of the massive internal human resources and irresponsible management issues that have been plaguing the airline company since long, seems like a looming possibility.

In CAPA​'s recent reports the verdict seems to be, The flagship carrier, has been floundering since long living on an unviable business model and has been kept alive by the generous Indian Tax payers. A defining period with the merger between Indian Airlines and Air India is expected, which holds the key to the most critical issue of the integration of human resources, so far ineptly handled almost to the point of being ignored, as no one within the senior management or at the government level has taken responsibility of the severe mismanagement.

Issues like a failed merger and other matters of integration have been a constant source of raking within the employee ranks of the company. In the year 2011 under the consul of Justice Dhamadhikari a committee was established to look into staff grievances that had been neglected for years. The report of the committee​'s findings was submitted in early 2012 to the Ministry of Civil Aviation. However the government is left almost with no other viable options but to implement what the report recommends, in the absence of virtually and strategy of the company to deal with the issues at hand.

CAPA expects that the outcomes of the proposed action will be probably met with mixed responses from the unions and industries. Air India veteran Jitendar Bhargava agrees with the report and says ​"The survival of Air India in its current avatar is almost impossible. The harsh realities of HR mismanagement need to be addressed as a crisis is looming on the horizon with the ineptness of the management to handle the critical issues"​.

The government is preparing to adopt what seems like a firm stance by limiting discussions with the union, there are rumours of the result of the acceptation of the report, which could include shutting down the national airline on a temporary probationary period, in the coming months.

CAPA​'s report also voiced its opinion by pointing out that the mismanagement issues could be set for a change at the most senior level of management which includes the position of Chairman and Managing Director; this might set up the new team with highly complex situations. Also the high profile non-executive departures in the previous year and the impending appointments in a number of senior government posts have affected the strengthening of the Board.

The report also expounds the fact that for the last two years CAPA has been in favour of placing the Airline company under special administration, as there is nobody taking responsibility for the much needed turnaround of AI, an unrealistic feat in itself, however citing the example of Satyam, for any progress to be achieved this seems to be the only feasible option.


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