Air India-Road Map for Revival & Growth

Current situation @ Air India can’t be less than a surprise military strike and that deserve a response equally or more with military precision. A lot has been already said about why and how Air India has come to this state in many reputed columns. However, you can’t do justice to readers with your strategy unless you inform them about your diagnosis; therefore, need to briefly sound out what ails the national carrier to seek a bailout package from the central Government.

Broadly speaking, Air India faced two challenges at the same time i.e. Internal and External. Internal challenges of Air India are well known and too many to cover in this column; the ones that top the list is Leadership, Morale of Staffs, Too many hands for too less work, High cost of operation, A non business like mindset across the organization- Sarakari style and many others. Unluckily, the external environment has also not been very kind either. The global recession and previously very high cost of aviation turbine fuel have taken wind out of the sails of many a carrier including Air India.

Can Air India survive this tough time? Certainly, Air India would be able to revive and grow to become one of the best money making Airline. What is needed is both the Owner (Govt.) and Management(Air India Board) plus the people behind the machine & processes(employees) should be willing and should have intention to offer the country with a robust domestic and international carrier with global standards in larger interest of the economy.

Where to start? Is the biggest stumbling block in human mind and same is equally applicable when you write strategy. In this case, you can’t start your exercise else where but at Leadership which would put the other jigsaw to the puzzle. The Current leadership does not have a vision for an organization of Air India’s stature; nor do they have the knowledge of the market or the business of running an airline. Therefore, obviously the new Leadership must be put in place keeping the above criteria in mind. In our opinion Air India could have a team of five top executives (Chairman, Vice-Chairman, Managing Director [ceo] and two Dy Managing Directors) with complementary skill set. Chairman could be from Piloting profession with exposure or interest in the business side of the airline, Vice-Chairman can be from aviation engineering stream with business background or appreciation of the business for a consultative role to keep their respective flocks motivated and offer inputs to the board in their respective domain knowledge for decision making. While Managing Director must be hired from outside and from services industry from pool of successful CEO in private sector, preferably woman with a caring attitude and investment banking back ground to keep the cost of the organisation in tight lease and leverage her investment banking background to go for a Financial Reengineering to bring back the Airline into pink of health with unstinted co-operation of other senior colleagues in the board. Her role should be that of

“Jubin Mehta of Philharmonic orchestra” the Conductor in Air India. My preference would be for Ms. Falguni Nayar of Kotak. And out of two deputy managing director, one should be from hospitality industry and the other must be an expatriate airline veteran. The board should also contain a few wise men from diverse businesses to mentor the board with their knowledge and perspective. My preference for the independent external directors are: Ratan Tata( being a pilot himself and business man with repute, Anil Ambani( A pioneer in large scale operation and erudite huge fund manager , Sunil Mittal ( An entrepreneur with a difference and again pioneer in outsourcing),

Ms.Hema Ravichandran (With domain knowledge in HRD and an adept practiceioner of retention strategy in large organisation) and Ms.Rama Bijapurkar (from Marketing domain).The morale of the story is to mobilise a set of competent unlike mind with a common task (turn around of Air India) to bring about path breaking innovation in the systems and processes to kick start the revival of Air India and little later the consolidation of the airline.

Other most important strategy, currently for Air India is how to increase the sale/revenue? The value proposition should sit around “Money’s value in Air travel” to attract and appeal to more and more customers from other airlines and other mode of transport. Suitably backed by increase in Operational Efficiency: Flights in Time, Pleasant Traveling Experience, Quality of ambiance in the aircraft, healthy food & drinks, caring interface at check-in at airport and yes, of course, efficiently managed pickup and drop of travelers by outsourced dedicated cab service.

One unpleasant decision for new management would be to replace 250 out of 500 middle management personnel with new lateral hires from private sector across Industries and show the door to the top 25 people of Air India with due niceties and protocol to make the quantum jump in operational efficiency.

Further, Air India could tap sales through long term contract with advance payment with discounts and interest propositions for bulk users. Again, arrangement with hotels and travel agencies could be revisited with suitable package to attract more customers. More over, identification of new niche market like sports, movie production and creation of new niche products like Chartered flights to important business, tourist destinations and also all season products like Chartered flights for World tour could bring higher sale and revenue in short term. Sponsorship opportunity could be tapped to increase the other income for the airline.

An exclusive Cargo Division could be created as new profit centre with all old Aircrafts if it is economically viable to tap the growing cargo business both domestic as well as abroad.

Reducing cost in an airline and that to Babu Run Air India could be the worst nightmare for the new management of Air India. However, to save the airline from sinking further; the new management would have to adopt an innovative strategy to reduce the employee strength meeting international standard for employee to aircraft ratio; at the same time earning their co-operation in the interest of all stakeholders.

• Employees can be offered, Leave without pay for two years along with company (Aggressive HR) help for relocation in Govt. & private sector and understanding to hire them back in good times after two years.
• Unproductive and unbillable employees can be offered separation with a commitment to outsource all non core services of the organisation to the company/co-operative floated by such employees.
• Cut your coat according to your cloth otherwise you would look necked; therefore, salary of all employees and management could be rationalised progressively with 30% cut in top, 20% cut in middle and 10% cut for rest of employees who retains their job on the basis of merit and efficiency.
• Freeze of all allowances & perks of all staffs which do not have co-relation with productivity/bottom line.
• 50% cut on all administrative expenses not linked to operational efficiency.
• Restructuring of Bulk Cost Centre: New management need to examine the cost-benefit analysis of outsourcing Aircraft Maintenance. Otherwise, Aircraft maintenance division could be restructured into an independent profit centre.(just like MRO with joint ownership of Govt., Air India, Air India employees and Aircraft Manufacturer)
• New management also necessarily need to revisit the purchase contract of new aircrafts to renegotiate; if feasible to arrange a short term system for payment as per flying miles/hours or else to reduce the EMI by half for two years to be suitably adjusted later in order to arrest the fund out flow.

Last but not the least; new management has to create infectious enthusiasm in the organisation by aiming at an unassailable goal to be just “The Worlds Best Airline” followed by hiring five hundreds of fresh graduates from the campus (Boys and Girls with good personality and communication skills) as interns to man all such customer interfacing/cabin crew jobs to spread only Joy & Happiness. By the end of implementation of such a strategy I guess, Air India would have climbed the chart buster of global aviation Industry. Hope, Praful Patel is listening.

Author: Bikash Choudhury, Chief Executive of Strategy Consulting Firm based at Bhubaneswar, Orissa, India. Contact: Mobile: 00 9853426657 Tel: 91-674-2720271

Email: streben.market@gmail.com & bikashchoudhury@sify.com

How to Create 2.5 lakh new jobs?

"Amul" experiment of Gujurat Co-Operative Milk Marketing Federation, in Dairy products can be recreated Again in "Green Vegetables" in Orissa. Govt. can easily create 2.5 lakh new jobs in 50,000 plus villages in the state.Can it be as easy as this? Never, but Possible only if the Current political Leadership decide to setup an Organisation with National/ International bench Mark just like GCMMF, in Gujurat/NDDB.

Back Ground

1. Orissa, currently need to be Best in the Country at least in one thing to become a Viable Brand. Gujurat is for Milk & Business & Industry, Maharastra for trade and Industry, Tamil Nadu for Low Cost Manufacturing and IT, Kerala for Tourism. Opportunity for Orissa to become best least cost "Supplier of Fresh Green Vegetables" in the country by using "Amul" model of Co-operative.

2. Reliance, Bharati and other multinationals are looking at this marketing space but may not succeed due to Supply Chain bottle neck.

3.In few years from now, the Urban India would have 40% of the population-therefore, a huge organised market waiting.

4.See the Contrast- OMFED just above Rs.100 Crore organisation & Amul-GCMMF nearly $2 billion USD .

5.The Differentiator would be the DNA of the Co-Operative Organisation created for this purpose, The Global Ambition.

6.Currently, as per my Information 40% of the Green Vegetables produced in the state do not reach the kitchen, spoiled on the way.

7. Large Market Opportunity for Value Added- Packaged Vegetables, Cut Vegetables, Processed Vegetables and Ready to Eat green curry for Double Income House holds.

8. Let the Govt. create an organisation like- OGVFED( Orissa Green Vegetable Farmer Federation), Hire Best Leaders from the Industry across the globe, Collaboration with CFTRI Mysore, create a national/International brand for green,processed,ready to eat vegetables, Capture the National Market and create a Brand Orissa in Agriculture.

9. In a span of 5years state govt. can add 2.5 lakh new jobs in rural areas alone.

10. Govt. of Orissa would receive ROI in multiple of 5.

A Differently Able Country

Thirteenth Finance Commission would submit its report to the Central Govt. next month October’09. All finance commissions after due diligence recommend the modalities of distribution of shareable taxes between Central and State Govt., religiously, as per their term of reference; that has resulted in rapidly growing disparity between Rich & Developed States and Poor & Under Developed States in last Sixty Years. Incremental Changes are passé. Thirteenth Finance Commission must step out and recommend some thing Radical to Accelerate the Growth of Poor and Undeveloped States in order to minimize the disparity and check the incidence of growing violence inside homes and also on the Streets. Here are a few Ideas for the consideration of eminent chairman and members of the finance commission.

1.Poor States should be allocated funds Over and Above their due share of taxes and Plan Assistance (subject to efficient utilization of resources allocated) to bring their development to at least at the Average level of development in the country in 5-10 years.

2.A few years Richer States can forgo (sacrifice) their just revenue share to help develop the poor states in order to check the ever growing disparity among Rich & Poor States and among regions in Larger interest of the country. Otherwise, due to lack of resources Poor states would remain that way for long time and Bring down the Overall growth of the country. Only, higher growth in GDP; without addressing the issues of development in poor states would only accentuate Disparity, Social disharmony and discord as seen in Naxal infected areas. And, Identically in the slums of Mumbai and other metros due to migration of people from poor states.

3. Richer states are in better position to raise long term capital in market on their own, due to higher disposable income of their people. In the words of Economist A.C Pique “Nurse the baby, protect the Child and free the adult" the principle, could be applied in distribution of resources by the Finance Commission.

4. In progressive family, Rich and well to do members get together to pull the financially weaker member of the family, to a decent standard of living. And, enhance the overall stature of the family in the neighbor hood. Hypothesis may be kept in mind by the finance commission.

5. India is rightly being seen and talked about in global forums “as a country at the door step of being a Regional Power” but Handicap of Poorer Eastern States would jeopardize such ambition.

If, even one limb of a person is dysfunctional, he remains a Differently Able Person rest of his life; how about an acronym “a Differently Able Country”?

Resist Temptation to Strike Pakistan

People world over silently enjoyed the spectacles of shoe throw at American President Jorge Bush at Baghdad press conference. Bush himself regretted about the wrong intelligence about Iraqi possession of WMD which led to the war. President elect of US has criticized the war of Iraq from the beginning. Indian leadership must now recognize perils of aggravating already a failed country although Pakistan does not deserve a consideration in any count but it is in our own supreme National Interest, we must resist the temptation. India is a great country and just Mumbai incident however painful it might have been does not justify a shrill response rather India must consider a strategic response which should break the back of all state and non state actors of Pakistan who have been working against Indian interest for long time.

Indian attack would give Pakistani ISI and Military opportunity to take full control of the affairs of state and nascent democratic experiment would get derailed forever. More over, Indian strike would help forge unity among Military, ISI, and Jehadi fundamentalist of all kind to train their gun at Indian Interest at all the time. India must understand the power dynamics of Pakistan which is in constant flux. Neither Army is under full control of Democratic Govt. nor does ISI take all orders from Army the main sponsor of the organization. The bombing of Pakistani Air Force One with General Jia ul Haq on board was a live example of how these forces interact with each other at different times and situations. India should exploit the weak power dynamics in a covert manner as Americans have been doing with reasonable success on their own National Interest.

Indian leadership must display vision for a country of Indian strength. A billion population with one trillion dollar Economy and growing at an average speed of 6.5-7.5 % in a fiscal year, society rich with diversity in religious faith, language and culture. India has been considered as a mature nation in global flora from the beginning be it in non alignment movement in the cold war era or in contemporary world politics, India is considered as a regional power with potential for global leadership. Americans pursued the Civil Nuclear Deal with India in an exceptional manner was not symbolic but displays Americans deep understanding of future potential of Indian state. We must use our position in the neighbor hood to assert our role as a Peace keeper in the region through diplomatic and strategic offensives to form a conglomerate of willing nations against International Terror in South East Asia.

Traditionally Pakistani Jihadi elements are generously funded by sympathizers in Arab countries, Overseas Pakistani in Europe and America. On top of diplomatic initiative to block the major funding channels; India must, now, appeal to the head and heart of all sympathizer of fundamentalist terrorist forces with the sufferings of family of deceased and all the injured in 26/11 Mumbai attack by their physical presence in these countries to create strong public opinion and marshal the civil society in our offensive against terror across the border in Pakistan. International community at large must realize that India is acting as a responsible nation in spite of exceptional provocation. Let the global civil society fight the inimical forces against peace of the region on our side.

Last but not the least, Pakistani civil society activist should receive encouragement, moral and material support from Indian Govt. unequivocally to embolden the nascent group of Pakistani Peace lovers to exert pressure on their democratic Govt. to see reason and logic to face the war mongers in the establishment of Army and ISI with boldness expected out of them in the interest of impoverished people of Pakistan who have elected peace and democracy in recent general election. Top down and bottom up approach may not get the desired result in short run; however, it will certainly remove the sting out of Indian shells as and when India choose adroitly to exercise that option for protecting its Supreme National Interest.

Story of Two Brothers, 34 Years ago

A 34 year old story about two brothers. Older brother was about 6 years and younger one 3 years, born to a very dynamic and benevolent father and ambitious mother living in a small township in the eastern part of the country. Once, mother left the two young children at the disposal of her husband and apparently went for a visit to the Ashram of her family Guru. However, her Industrious husband soon got busy himself with some stitching work of the household and got so immersed in his work that he completely for got about the two kids. The younger one started searching for her mother and grew very sad and miserable, any amount of consoling by the older brother did not pacify the little kid; rather he began to cry silently inconsolably. Elder brother became very worried, wished to do some thing about it; knowing very well that approaching father would invite scolding and may be a thrashing, good one at that. Decided on his own that mother must have gone to father’s sister house, a good 3 kms away and if I take the little one to mother then he would be happy and cheerful. Older brother wish to see the, usual, cheerfulness, which was missing from his brother’s face and carefully whisked away the little one from the house in spite of vigilant eyes of his father and carried the little one to Aunts house unfortunately his mother was not at the Aunts place; sadly older boy did not get any help from Aunt’s family. Again, he brought his little brother on his fragile shoulder back home safely. By that time father had already raised an alarm and mother had also reached home. On seeing the two brothers at the gate of their modest home; everybody pounced on the older boy and gave him enough; both in cash and kind on his back and cheeks and the older one started screaming in Anger, Frustration, Sadness and of course for the disrespect and abuse, no body ever cared to ask what prompted the older boy to do, what he did? Sadness and regret of the event remained locked deep inside the mind of Older Boy for the rest of his life. History has uncanny knack of repeating itself; as fate would have it while playing with his younger brother a few years later, the discernible eyes of the older boy noticed a faint blood stain on the white canvas of his younger brother and immediately insisted to remove the canvas shoe and to every bodies surprise, noticed a small lizard in the shoe and a bite mark on his feet with blood oozing out from the wound. Without waiting for any one, the older boy put his little brother on cycle and rushed to the hospital nearby and left a word with friends to inform mother immediately to come to the hospital. The doctors at the hospital appreciated the older boy and took prompt medical care of the little boy and later, declare the little boy out of any danger. Older boy now stand vindicated of his decision and silently raised a toast for a long life of his brother. The older boy has now turned out to be an impeccable Strategy Consultant with an MBA wife to boot and Little boy has conquered frontiers of software development technology in USA and proud owner of a model look alike stylish, tall and beautiful wife, blessed with a gorgeous and cute little daughter, all of five years adept in gulping two big portions of KFC with liberal amount of carbonated chilled drinks and a bunch of paper napkins to control overflowing tears.

Smart-Waste Disposal

Solid Waste Disposal has become hurculean task for the both the twin city Corporation BMC & CMC. Commissioner of BMC is under fire from the High Court of Orissa for some time now. Still the solution elude the authorities regarding land for a dumping site.BMC need to think out of the box and devise a method to efficiently manage solid waste(500 tonne per day for Bhubaneswar alone) by following the foot steps of Chennai Corporation by out sourcing the solid waste disposal and cleaning of city roads to French Multinational corporation CES ONYX for seven years; the company is doing a great job that can be confirmed from any resident of Chennai. Otherwise, BMC may chalk out a new path in SWD management; that is actually marketing the solid waste through value addition by segregation of wastes from the start of SWD life cycle through designated collection bins for each type of wastes like wet waste from kitchens for Vermi Compost by Interested Biotechnology Company, Paper & packaging card board waste can be recycled by Packaging Industry and identically Polythin & Plastic garbage can be collected and sold to a Plastic manufacturer for recycling as raw material and again all E-wastes can be aggregated and auctioned to interested party at huge profit to BMC. BMC may appeal to the residents of the Capital city to segregate wastes from home and deposit in respective waste bins near to their homes, which they would happily comply in their own interest of litter free roads and clean city. Now, instead of searching for a dumping site BMC must hunt for a Company who would buy the entire value added wastes at market rates. BMC may not have to spend a penny for arranging for Waste Bins as such bins can be sponsored by the Industry. BMC could be richer by two hundred crores of rupees annually, by actually selling what we throw from our homes.


Bikash Choudhury
Bhubaneswar

Evening Group Meeting at RRL with Generation Gap

August 1983, we jumped from school to college and to our newly minted freedom at College--no uniform and freedom to bunk classes as and when you desire to while away your time in the college corridor to just observe “the things of beauty & joys for ever” or at nearby tea stall discussing mightier issues of Global reckoning. But, our college was having semester system with its surprise quizzes, assignments, midterm and final semester, 30 exams in each six months. The initial euphoria of getting into college evaporated just when the first midterm result was out. But, our friends in other city colleges were having a gala time and we were very envious of them.

After the college hours, in the evening our group usually congregates at the entrance of Regional Research Laboratory (now rechristened as mineral & metal institute) and take seat on the left culvert facing the gate and on the other side was regularly occupied by Senior citizens of Acharya Vihar. There was a gap of about fifty feets between the two culverts which used to represent the Generation Gap between the two groups. While our group was chalking out plans for future higher education, entrance examination of various technical institutes and some times discussion veered round to popular movies, cricket and good looking girls in the college and in contrast senior people at the sunset of their life used to discuss or despair over the state of politics, their grand children and some time sweet and sour experiences in their personal and professional life. These two groups meet so regularly at the same place and at same time that became a permanent feature of the area; and it came to the notice of local press of that time. A few of the seniors some time walk over to our side to say just hello to the familiar faces and make polite enquires about our studies. After years of meeting each other the two groups silently developed a emotional attachment for each other. We miss them and their carefree laughter when they are not around as they would gently enquire about our absence from the place due to exams and other commitments.

With time, another group of six aggressive youngsters came in the scene, they would generally came in their bike and some time do stunts like driving bikes with front wheel in the air and other many such belligerent activity. Our group and senior citizens did not approve of the commotion at the place but never dared to approach them. But, as fate would have it some of these group members made little excesses while collecting contribution from a few Mallu (Keralaites) residents of the area and remain behind bars for a few days; their parents later packed them off to Delhi and our group silently enjoyed the calmness in the area.

After a few years many of our group members left the city for higher studies and only visit us during holidays. Our group strength now came down to four of us but we continued to meet at the same place for an hour. By this time I had picked up a job after completing my Post Graduation in a private company in the city. Days were passing by and we were getting anxious and worried to make some thing out of our life.

Our discussions would now concentrate on various opportunities in profession and business. Group members were getting desperate to become rich and famous and wished if there were any short-cut. Out of the blues one fine evening a good looking school girl approached one of our friends near the gate of erstwhile RRL and rest were history. Our friend was taken aback for some time but gained composure and sailed in the same boat of love. Other group members offered him moral support and time to see him through this uncharted territory. By this time the attendance in the other side of culvert, among oldies was running thin and with the enterprise of love our group anchor also missed to visit our evening gathering which brought the curtains to our community of generation gap. Hope to revisit the place with our group to the right side of the culvert with our grand children in tow.

Evening Group Meeting at RRL with Generation Gap

Bikash Choudhury

Bhubaneswar