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Plane Spotter
After years of falling profits and declining
market share, Air-India is taking off in a new direction. And the man at the controls
is a career bureaucrat with a penchant for troubleshooting
By Sayantan Chakravarty
Vasudevan Thulasidas is flying on a wing and a prayer. As chairman and
managing director of Air-India, the 55-year-old IAS officer has been given three
years to turn around the airline, whose baggage includes entrenched unions and a
balance sheet awash in red ink for most of the past 20 years. He may have spoken
too soon, but with a year of his term already out, Thulasidas—the first
full-time boss appointed for Air-India after a gap of nine years—believes his
prayers are being answered.
Sample this:
Air-India has wiped out the accumulated losses of the last three years, the
pilots are back in their cockpits instead of calling in sick, and the unions are
actually listening
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Yes, it’s an uphill battle reviving an ageing
Maharajah, especially when aggressive new private airlines like Jet Airways and
Air Sahara are raising the stakes in Indian aviation. But what could give
Thulasidas an edge in the dogfight is the experience gained in his past stint as
the chief secretary of the difficult northeastern state of Tripura. The man is
tireless, he even works from home on Sundays. And more importantly, he is armed
with a no-nonsense mandate from the government.
When Thulasidas got into the hot seat, he knew exactly what he had to do. The
chairman prepared a must-do list to turn around Air-India. Fleet expansion was
top priority. “Our plan is to double the fleet to 75 aircraft in three years,”
he says. He better hurry. The Maharajah wears an aged look because the last time
the airline purchased an aircraft, a Boeing 747, was way back in 1993. And the
last plane it leased was in 1996.
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The upshot: market share nosedived to 19 per
cent, compared with 42 per cent when the airline was run by founder J.R.D. Tata.
As profits fell, so did the faces at the carrier. And with a string of chairmen
coming and going through the revolving door, Air-India seemed to be on
autopilot. Thulasidas gave the government a reality check. “Ageing aircraft +
dwindling fleet = lower margins, lower profits,” he says. It was a wake-up call
that had its effect. After years of dilly-dallying, the government okayed plans
to acquire new aircraft. “Our plan is to acquire 68 aircraft, 50 of which will
be wide-body for Air-India and 18 smaller aircraft for the no-frills Air-India
Express,” says Thulasidas.
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The chairman believes there is
no reason why Air-India should not be the best airline in the world. After all,
in the fifties and the sixties, the Maharajah was a synonym for exclusivity. “To
attain those heights will require team effort. I will focus on building the team
first,” he says. The chairman started involving the middle management in the
day-to-day operations of the carrier. He also started talking with the unions.
In an industry where service is paramount, he stressed the need for the unions
to get their act together. “Based on the discussions, we have formed short
(3-year), medium (5-year) and long-term (7-year) plans.” |
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The quality upgrade is
multi-pronged. In terms of aircraft, Air-India will acquire modern Boeing 777s,
which will have personal entertainment consoles even in economy. Advanced A310s
have been shortlisted from Airbus. The airline is trying to improve the quality
of its wine. The unions have been told to improve inflight service (translation:
don’t snap at passengers when they ask for more coffee). Thulasidas has
initiated the Making a Difference programme that attempts to teach public sector
employees private sector values. Another key area is network expansion. After
several years, Air-India will again be flying to Toronto. New destinations
include China, Mauritius and Seoul. There is going to be a major push into South
Africa too.
Thulasidas means business. “We are re-negotiating past agreements,” he says. In
summer 2004, Air-India had 10 flights a week to the UK; this year there are 24.
Another milestone will be the launch of the low-cost Air-India Express on April
29. “The airline, which will have Boeing 737s and Airbus A330s, will fly between
stations in Kerala and the Gulf,” says Thulasidas, who is the son of an school
teacher from Kerala. Now the bad news. A senior industry executive says the odds
are stacked against Thulasidas, who has taken over at a time when the government
is talking about an open sky policy. Thulasidas could also run into turbulent
weather if he even talks about privatisation. Net effect: Air-India is pitted
against private airlines but with a public sector workforce. It’s certainly not
a joyride for Thulasidas.
Then there are the little
details that cause furrows on the chairman’s forehead. “Airlines operate on
wafer-thin margins,” he says. “Already costs are up; salaries, agents’ fees,
parking and landing fees, fuel charges are climbing. Then if a sector bleeds, it
has to be closed down. That hits market share.”
But you know Air-India is in safe hands when he tells you this little factoid:
“Air-India is the most widely known Indian brand.” He has a point. After flying
the global skies for 53 years, the Maharajah has considerable brand recall,
which the chairman wants to leverage. Thulasidas has pulled Air-India out of its
dive; now it remains to be seen whether he can land it safely.
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