Air India :Flight's Over

 Air India has been grounded. Now that its official that the country’s national carrier will be bailed out by the government, the easy part is over. The hard part starts now. Restructuring a gargantuan company which is packed to the brim with too many employees, a lackluster business model, over dependence on the government and huge losses is a very difficult and time consuming task. There are simply way too many people to satisfy and the fact that it’s a Public Sector Company does not make it a single bit easier.

Praful Patel must be ruing the day his party bargained hard for that extra cabinet berth which eventually led him to become the Minister of State for Civil Aviation. A Tier-2 Ministership with independent charge confirming that the fate of the Airline industry in India once again falls on the shoulders of Patel.

Just yesterday Praful Patel announced that bailing out Air India was inevitable. The amount that the Airline is asking for is in the range of over Ten Thousand Crore Rupees. A meeting with The Prime Minister has ensured that the carrier will be bailed out but will definitely not be receiving any money now.

The money will be given only after the presentation of a concrete and viable financial restructuring plan. The time limit is set to one month.

Air India has simply got no choice but to start terminating the jobs of many of their employees. There are too many personnel doing the same jobs creating a case of overcapacity.

It’s no wonder that AI declared that about 31,000 of its workers would be receiving their salaries more than a fortnight late. Even the top management has been asked to forego their salaries till later.

Because it’s a state owned Airline it will get it’s bailout in due time, the flipside to this is the conditionality that the government has attached. No money till the Airline shapes up.

The unions have heard this and are intent on making sure that its members and therefore company workers don’t lose their jobs. They’re peeved about the fact that many have not received their monthly salary.

Most of the Union bosses have been singing the same line which is that there will be no work done by them from the First of July if their wages are not paid. It’s the making of a crisis.

 But the company itself will remain in the spotlight for a long time. It simply has been unable to innovate its way through the changing times. It’s also been unable to compete in the low cost sector while the private players have seized the opportunity.

The only sensible move which has come form Air India’s side was a few years ago when it merged itself with the domestic carrier Indian Airlines thus cutting costs and combining operations.

It’s going to be ten times as difficult for them to get out of this mess. Like the AI chief said a few days ago “It’s a fight for survival.”