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By Raj Chengappa, Editor-in-Chief |
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This is not an Islamic uprising – though it could become one – but, save for the usual talk of Muslim Brotherhood participation in the demonstrations, it is just one mass of Egyptians stifled by decades of failure and humiliation
Profile
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By Raj Chengappa, Editor-in-Chief
Arvind Jadhav, 53, Chairman and Managing Director of Air India, may well turn out to be the last Maharajah for the airline. The controversial merger of the country’s two national airlines, Indian Airlines and Air India, in 2007 led to even bigger losses that now total Rs 13,325 crore. Even as the government is working out a bailout plan, hard questions are being asked as to whether it’s worthwhile for public money to be squandered on the failing and flailing public sector airline. Jadhav spoke exclusively to Editor-in-Chief Raj Chengappa at his Delhi headquarters on how he sees the future of Air India and whether it has a future at all. Excerpts:
Indigo has now overtaken Air India in the domestic sector, pushing you to fourth in terms of market share with Jet Airways and Kingfisher occupying the top slot. What’s wrong with Air India?
The name of the game is basically whatever capacity you introduce in the market, you start earning money on that. Your ability to get more passengers depends on the amount of capacity you are going to put in the market. Our entire attention after the merger of Indian Airlines with Air India was not on introducing more capacity but trying to make better use of whatever capacities we have. Our revenue per available seat per kilometre has to be always higher than the cost of an available seat per kilometre. This can happen only in case the seat factor goes higher. Over the past year and a half that is what we have been attempting to do. We have tried to make sure that our seat factors creep up.
But what made them overtake you when at one point you were the lead carrier domestically?
If you look at the capacity made available by Jet Airways, Kingfisher, Indigo and Air India and Spicejet and others, you will find that they are ramping up their capacity yearly. We had earlier got permission to buy 43 aircraft. As long as these aircraft were coming in, we were also ramping our capacity. But our ramping up capacity was lesser than that of either Jet Airways or Kingfisher. For example, if we were adding five aircraft in a year, they were adding eight to nine aircraft in a year. Indigo has been the most aggressive. It has been adding 10 to 12 aircraft in a year and in the coming years Indigo is going to add more. I am not adding any aircraft. I have stopped since last September. Instead, we have removed 31 aircraft from service during the last one year either because they were old or we did not renew their lease. Rather than adding capacities, actually, we have cut down on capacity. With the existing reduced capacities, we have gone in for higher productivity. So, we maintained the same level of productivity as last year even though we were minus 31 aircraft. For a company like Air India which has to turn around, I have tried to make sure that our operations are lean, operational costs are low and then target for a higher seat factor. So, I am not at all in the game of market share in capacities. Right now the big question is how to stem the losses and make the airline profitable again.
Is the government working out a bailout plan?
The government has indicated that it will give Rs 5,000-crore equity, and for the balance figure, it will give some kind of sovereign guarantee apart from some deep discount bonds. I hope there will be a total assistance of Rs 18,000 crore in all. The final picture will be clear soon.
Instead of pumping in precious public funds, why shouldn’t the government disinvest in Air India and hive it off to the private sector?
Before taking up such a decision, the government needs to address seriously four issues: first, we have 40,000 employees and the government has to decide what has to be done for them; second, we have 132 aircraft and they need to be disposed of; third, there are various properties which need to be properly disposed of, including the brand name; and fourth, the big financial liabilities of the company also need to be addressed.
What is the true extent of financial liability that Air India faces? We do have a white elephant on the table. Air India has a Rs 18,000 crore debt liability and a Rs 15,000 crore capital loan liability. Even if the government wants to privatise it and wants to give it to an individual, that person will have to take a heavy burden of financial liability and there is hardly anyone who would want to do that. Ultimately, this heavy liability may have to be written off. Secondly, we have taken a loan for our 68 aircraft from the Exim Bank, that is around Rs 18,000 crore. So, how can one think of giving Air India to a private person with such heavy liabilities? Another issue is of 40,000 employees. My teeth-to-tail ratio is 395 while the rest of the market is around 100. So in terms of manpower I am four times over.
How many employees do you really need?
When I made a presentation to the government last year, I told them that if you want this company to survive the downward market trend, then we should have only 90 aircraft as compared to the 132 we have. Also that the number of employees is much more than the required strength and we need a maximum of 18,000 employees, the remainder, which is around 22,000, need to be removed or retrenched, salaries have to be cut down; you have to do all this. The company may be closed down, or it may be given to a private party, or it may be allowed to run. But some hard steps need to be taken. After all, somebody has to bell the cat.
Was it a wise decision to merge Air India and Indian Airlines? Hasn’t it worsened the problem?
My view is: you cannot have two airlines running in a public sector and competing with each other at every level in an open sky format. One day you have to take a view as to which is the airline going to run. When the merger happened, the Asian market had already opened up and mergers were taking place. Everybody was ramping up. And here was Air India with 68-odd aircraft and Indian Airlines with 70-odd aircraft trying to replicate each other. The second issue is: Air India was a global airline with headquarters in India. But it had no depth even in India. The market all over the world had started changing. Global airlines without domestic depth have all died. Pan-Am, for instance, refused to go for domestic depth and they died. And they were replaced by airlines which had domestic depth which went international. Most of the national carriers took to merging with domestic partners in order to sustain themselves. Many who did not do that failed.
Were there any airlines which have survived without merging?
Among those that survived were Singapore Airlines and the Gulf carriers – both of them depended on India because of the huge market. Had it not developed within India, there was no other way to survive. Indian Airlines had a domestic depth and it had to ramp up its entire international operations on its own and then fight it with Kingfisher and Jet Airways. So for the government it makes sense that if you have two airlines in the same stable and if both of them have no space in the market, then they have to have one merged airline. Therefore, what the Government of India did at that point of time was to merge the two airlines in order to bring economy of scales, reach out to larger markets and procurement, and also to compete with Singapore and the Gulf carriers.
What were the big issues that the merger threw up?
The key issue is integration – be it IT network integration, engineering integration, commercial integration or ultimately product integration. But when the merger happened, the problems of an age-old public sector undertaking came upfront. Both the organisations have not yet solved all the HR issues – their pay scales, their compensation packages, their career progression, their agreements with the union etc all were legacies. Even if Indian Airlines and Air India were separate, their problems would have been upfront even now. So are you going to solve the merger problem or are you going to solve the age-old public sector undertaking problems? These are the issues on the table right now.
What have you done about network integration to make it easier for passengers?
We have already applied for a single code. So from March, there will be a single Air India code all over whether you go to Aiswal, Port Blair or Chicago. It could not happen earlier because our IT system was pre-historic. This has been a stumbling block for our entry into Star Alliance, our trying to get code share agreement negotiations, interline agreement and marketing arrangements.
What about the flight schedules?
We found that Air India schedules are not complimentary or supplementary to Indian Airlines networks and Indian Airlines are not complimentary or supplementary to Air India’s networks. So though, physically speaking, on a map we will show you connectivity from London-Delhi-Raipur but actually you have to spend more than 48 hours to go to Raipur. The first thing we did was to make sure that our international flights are all in sync with Delhi so what we have done is given you connectivity. So now if you are coming from London to Delhi and if you want to go to another Indian city, you could do this in less than six hours for 25 cities. That makes us far more competitive.
Will all this help salvage Air India?
We are joining the Star Alliance in a few months from now and ours will be a new brand, a new image and let’s say a new avatar. We are also hoping that our plan to restructure Air India would go through. That would include utilising our excess engineering capacity and ground handling to service other airlines by making them separate business units. These measures should revive Air India.
You run the risk of ending up being the last Maharaja of Air India!
There might be a mascot of Maharaja; but I am neither a Maharaja nor do I think on this line. We have to be globally professional, contemporary and totally customer-focussed. We need to put every effort for the betterment of the airline. My conclusion is that if this organisation is allowed to be run professionally and ruthlessly, it will do well again. |
This is not an Islamic uprising – though it could become one – but, save for the usual talk of Muslim Brotherhood participation in the demonstrations, it is just one mass of Egyptians stifled by decades of failure and humiliation
A
day of prayer or a day of rage? All Egypt was waiting for the Muslim Sabbath on Friday – not to mention Egypt's fearful allies – as the country's ageing President clings to power after nights of violence that have shaken America's faith in the stability of the Mubarak regime. Rumours are as dangerous as tear gas here. A Cairo daily has been claiming that one of President Hosni Mubarak's top advisers has fled to London with 97 suitcases of cash, but other reports speak of an enraged President shouting at senior police officers for not dealing more harshly with demonstrators. Mohamed ElBaradei, the opposition leader and Nobel prize-winning former UN official, has flown back to Egypt but no one believes – except perhaps the Americans – that he can become a focus for the protest movements that have sprung up across the country. Already there have been signs that those tired of Mubarak's corrupt and undemocratic rule have been trying to persuade the ill-paid policemen patrolling Cairo to join them. "Brothers! Brothers! How much do they pay you?" one of the crowds began shouting at the cops in Cairo. But no one is negotiating – there is nothing to negotiate except the departure of Mubarak, and the Egyptian government says and does nothing, which is pretty much what it has been doing for the past three decades. People talk of revolution but there is no one to replace Mubarak's men – he never appointed a vice-president – and one Egyptian journalist tells me he has even found some friends who feel sorry for the isolated, lonely President. Mubarak is 82 and even hinted he would stand for president again – to the outrage of millions of Egyptians. The barren, horrible truth, however, is that save for its brutal police force and its ominously docile army – which, by the way, does not look favourably upon Mubarak's son Gamal – the government is powerless. This is revolution by Twitter and revolution by Facebook, and technology long ago took away the dismal rules of censorship. Mubarak's men seem to have lost all sense of initiative. Their party newspapers are filled with self-delusion, pushing the massive demonstrations to the foot of front pages as if this will keep the crowds from the streets – as if, indeed, by belittling the story, the demonstrations never happened. But you don't need to read the papers to see what has gone wrong. The filth and the slums, the open sewers and the corruption of every government official, the bulging prisons, the laughable elections, the whole vast, sclerotic edifice of power has at last brought Egyptians on to their streets. Amr Moussa, the head of the Arab League, spotted something important at the recent summit of Arab leaders at the Egyptian resort of Sharm el-Sheikh. "Tunisia is not far from us," he said. "The Arab men are broken." But are they? One old friend told me a frightening story about a poor Egyptian who said he had no interest in moving the corrupt leadership from their desert gated communities. "At least we now know where they live," he said. There are more than 80 million people in Egypt, 30 per cent of them under 20. And they are no longer afraid. And a kind of Egyptian nationalism – rather than Islamism – is making itself felt at the demonstrations. January 25 is National Police Day – to honour the police force who died fighting British troops in Ishmaelia – and the government clucked its tongue at the crowds, telling them they were disgracing their martyrs. No, shouted the crowds, those policemen who died at Ishmaelia were brave men, not represented by their descendants in uniform today. This is not an unclever government, though. There is a kind of shrewdness in the gradual freeing of the press and television of this ramshackle pseudo-democracy. Egyptians had been given just enough air to breathe, to keep them quiet, to enjoy their docility in this vast farming land. Farmers are not revolutionaries, but when the millions thronged to the great cities, to the slums and collapsing houses and universities, which gave them degrees and no jobs, something must have happened. "We are proud of the Tunisians – they have shown Egyptians how to have pride," adds another Egyptian colleague. "They were inspiring but the regime here was smarter than Ben Ali in Tunisia. It provided a veneer of opposition by not arresting all the Muslim Brotherhood, then by telling the Americans that the great fear should be Islamism, that Mubarak was all that stood between them and 'terror' – a message the US has been in a mood to hear for the past 10 years." There are various clues that the authorities in Cairo realised something was afoot. Several Egyptians have told me that on January 24, security men were taking down pictures of Gamal Mubarak from the slums – lest they provoke the crowds. But the vast number of arrests, the police street beatings – of women as well as men – and the near-collapse of the Egyptian stock market bear the marks of panic rather than cunning. And one of the problems has been created by the regime itself; it has systematically got rid of anyone with charisma, thrown them out of the country, politically emasculating any real opposition by imprisoning many of them. The Americans and the EU are telling the regime to listen to the people – but who are these people, who are their leaders? This is not an Islamic uprising – though it could become one – but, save for the usual talk of Muslim Brotherhood participation in the demonstrations, it is just one mass of Egyptians stifled by decades of failure and humiliation. But all the Americans seem able to offer Mubarak is a suggestion of reforms – something Egyptians have heard many times before. It's not the first time that violence has come to Egypt's streets, of course. There have been police mutinies before – one ruthlessly suppressed by Mubarak himself. But this is something new.
Who could succeed Hosni Mubarak?
Gamal Mubarak The youngest son of Mr Mubarak and his half-Welsh wife, Suzanne, Gamal was educated at the elite American University in Cairo, going on to work for the Bank of America. Mohamed ElBaradei  |
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Profile
Kapila
Vatsyayan, now 82, is a well known name in India, particularly in Delhi's cultural circuit, but few know about the long years of strife and commitment that chiselled her into a prodigy of classical dance, art and culture. She was barely 10 years old when legendary Acchan Maharaj spotted her talent. He was so impressed by the in-built talent in this young woman that his impromptu comment was: Bahut accha naachi ho, lekin talim ki jaroorat hai (you dance beautifully but you need training). The occasion was a school performance and among the audience were Acchan Maharaj and Nirmala Joshi, who later became the Secretary of the Sangeet Natak Akademi. Kapila's dance on the theme Ardhanarishwara was applauded as great choreography. On his suggestion, Kapila became a disciple of Acchan Maharaj. Those were the times when dance was coming out of royal courts. Years later, Kapila paid her guru dakshina (debt) to Acchan Maharaj. The great legend had passed away, leaving behind his nephew, Birju Maharaj, who had lived under his tutelage in Lucknow. Kapila brought Birju to Delhi and established him in the dance school she was running along with her friends. Subsequently, Birju Maharaj became a legend in his lifetime. During summer vacation in her student days, Kapila used to learn Bharatnatyam from Meenakshi Sundaram and Rukmini Arundale's disciple Lalitha. Then, she invited Gura Ambi Singh to come to Delhi from Manipur and learned Manipuri dance with him. She also brought Lalitha to Delhi. Unlike many of her contemporary artistes, Kapila has been fortunate. Her training began with the practice of dance from Oriental dance to Kathak, to Bharatnatyam and Manipuri. Her concurrent training in English literature at Delhi University provided critical apparatus. Besides Western art and whatever she learned in pre-Independent India, she had to pick up Sanskrit and Indian languages because of her family background which was a reformist one, deeply rooted in Indian ethos. In 1930s her family lived in Calcutta and was involved in the nationalist movement. After completing her MA from Delhi University, she went to the United States on a Barbour fellowship. It was a distinguished fellowship for Asian women based on the outcome of a written test. One day after her prerequisites for the Ph.D degree, she decided to return to India and gave up the fellowship. She has been quoted as saying that, "I felt that I was ignorant about the culture to which I belonged. I had to know it. I also felt that if I wanted to go further in English literature and Western art, I would have to go to its language foundations in Greek and Latin. Then there was this dance thing. So one autumn day outside the library in Michigan, I meditated and surprised my parents by returning home". Kapila returned to motherland searching for an identity and started travelling. She went from Madurai to Kanyakumari, to Palghat practically on foot and in buses and reached Kerala Kalamandalam. During her itinerary, Kapila met scholar Vasudeva Sharan Agarwal, who has written about 40 books on the history of Indian art and on India through the eyes of Panini. He strongly recommended that she should preserve these classical works. As the Head of the Department of Archaeology in Banaras Hindu University, Agarwal accepted Kapila as a special Ph. D student. She says: "Here neither my degrees in English nor my American education were considered adequate preparation. I had to take a Sanskrit philological examination. I did that and then got grounding in indology and archaeology." Kapila's favourite authors, however, have been Coomaraswamy and Heinrich Zimmer, an indologist and historian of South Asia, who first identified the radical difference between Western classic and Indian art. Without them, she says, "I do not think, I would be the person I am today". Kapila also reads parts of Upanishads that her parents gave her. She has herself written many books, including The Square and the Circle of Indian Arts, Bharata; The Natya Sastra and Matralaksanam. She blazed a new trail in 1990, leading scholars of India and China to "look at each other" instead of trying to see each other's country. She resigned as a member of the Rajya Sabha soon after her nomination following a controversy over the office of profit in 2006 but was re-nominated in April 2007 for a full-term, expiring in February
2012. |
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