Asia Guide Tours And Travels: Air India plans to rejig top management structure

MUMBAI/NEW DELHI: Air India plans to rebuild its top management team as three high-profile executives, including its expat chief operating officer Gustav Baldauf, called it a day following differences with the civil aviation ministry.

The airline's chairman and managing director Arvind Jadhav, who faces the flak for bringing executives from outside on exorbitant salaries, will make a presentation on the new management structure at the forthcoming board meeting. The airline's board is slated to meet on March 15.

"The CMD is expected to present his plan on what the new management structure should be in the forthcoming board meeting. However, changing management structure at the top won't make any difference unless the employees cooperate," said a top civil aviation ministry official.

Though recent resignations have raised questions about Jadav's ability to achieve a turnaround, he has the support of the new civil aviation minister Vyalar Ravi

"I'm happy and satisfied with Arvind Jadhav's performance and have no problems with him," said Mr Ravi. Jadva's term saw Air India slipping to the fourth position in terms of domestic market share.

Jadav, however, will have to convince the board if he wants to retain the post of COO for Air India and its low-cost arm Air India Express. The airline's CMD will take a conservative approach this time, according to aviation industry officials.

"There was no framework of job requirement or no definite role and accountability for the selections that were made for people who were got from outside and made as Air India honchos," said a senior Air India official who had opposed the selection process.

The chief operating officer of Air India Express, Pawan Arora, was sacked last month and Air India's chief training officer, Stephan Sukumar, resigned last week.

Civil aviation minister feels it is tough to induct people at the top. "The question of inducting new people at the top is not easy and I can't talk about these plans in public like this. I have to consult my ministry and experts before deciding on that," Ravi added.

The board meeting is also likely to approve the turnaround plan, which is being finalized by consultancy firms Deloitte and SBI Caps. Air India will get an equity support of 1200 crore from the government. It will also restructure its debt ( 40,000 crore) and is likely to go aggressive to regain market share.

Government taxing your air travel in violation of rules

The hefty 10.3% service tax you are being made to pay to fly abroad for the past few years is violation of rules of International Civil Aviation Organisation (ICAO), to which India is a signatory.

To stop the fleecing, Air Passengers Association of India (APAI) has decided to take up the matter with ICAO as well as the civil aviation ministry.

India started levying the tax on international business or first class air travel in 2006.

“ICAO resolutions state that international air transport should be exempt from taxes,” Albert Tjoeng, spokesperson for International Air Transport Association (IATA), said, adding, “India’s service tax on tickets for international travel contravenes ICAO resolutions. It is ironic that despite being a member of ICAO, India should contravene its resolutions.”

ICAO is a United Nations agency that codifies principles and techniques of international air navigation and fosters planning and development of international air transport to ensure safe and orderly growth, while IATA is a trade body of international airlines.

“India is a signatory to ICAO, whose rules do not permit levy of service tax,” APAI president Sudhakara Reddy said.
What has pained APAI is the fact that in 2010, even the economy class — both domestic (Rs100) and international (Rs500) — was brought under the tax ambit.

“Now, they have added Rs50 to domestic and Rs250 to international air tickets. Earlier, it was a small amount, so we said nothing. But they keep on burdening passengers. We are seeking legal opinion on this and will take up the matter with ICAO as well as the aviation ministry,” Reddy said.

IATA says any further increase in service tax in 2011 might prove detrimental to the aviation industry. “It [India] is not following rules it helped create. The increase in service tax will place a higher cost burden on the Indian aviation industry. It [the tax] should be removed entirely.”

3. Pilots' strike call has few takers

Pilots working for Air India are divided on the call of a nationwide strike from March 9 by the Indian Commercial Pilots Association (ICPA), part of the erstwhile Indian Airlines, which has 680 members.

Demanding parity in wages between the erstwhile Indian Airlines and Air India pilots, ICPA has announced it would go on strike and sent notice to the airline.

However, the union’s earlier office-bearers and a large number of members are not in favour of the strike, especially with new Civil Aviation Minister Vayalar Ravi who has been a union leader at the helm of affairs. “Not only I, but a large number of ICPA members are against the strike. We should not even think of going on strike and support the airline at a time when it is in financial crisis and we are involved in evacuation of our citizens from Libya,” said Sandeep Marwah, former office-bearer of ICPA.
The pilots, which constitute pilots of erstwhile Indian Airlines, sent the notice saying the company had not honoured their demands of parity in salaries of erstwhile Indian Airlines and Air India employees.

“All the new office-bearers of the union are new and have called the strike to prove their might. How can you decide to go on strike after one meeting with the airline? This is completely unjustifiable at a time when the airline is in financial crisis,” said another former office-bearer, speaking on condition of anonymity.

Meanwhile, the management accepts that the pay scales are different but says that the job demands are also completely different.

“A pilot with an international operations flies a wide-body plane and is on long-haul flights. Their needs and demands are different. Also, erstwhile Indian Airlines pilots, who fly narrow-body planes, cannot be paid as much as erstwhile AI pilots,” said a senior Air India official.

On the issue of difference between the fixed and floating variables in the salary, the official said the minister had announced to form a committee and the issue would be looked into.

Meanwhile, the Aviation Industry Employees Guild (AIEG), the largest union of workers in Air India, also criticised the strike call despite an understanding having been reached between the aviation ministry and all unions, including the ICPA, a fortnight ago.

Says George Abraham, general secretary of AIEG, which represents 70 per cent of the staff of erstwhile Air India, “There is no need to go on strike when the minister agreed to set up a committee to look into all these issues. Even if the strike does not happen but sending a strike notice leads to a lot of revenue loss to the airline and this damage is irreparable when we are in huge financial crisis.”

automatically lead to similar demands, which have been or-general questioned whether authority staff were "overly helpful" to the company.

By
Neha Jain

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Asia Guide Tours And Travels

Friday, March 4, 2011

Air India plans to rejig top management structure

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