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Air-India losses mount due to bureaucratisation, excess staff

George Iype in New Delhi

Bureaucratisation and excess staff strength are the main reasons for mounting losses at India's international carrier, Air-India.

Since 1993, the 26-strong Air-India fleet has been in the red mainly due to overstaffing: A-I has a staff-strength ratio of 699 per aircraft compared to the global average of 190.

Aviation experts and government commissions over the years have repeatedly recommended downsizing at A-I. But stiff opposition from employees unions have led the airline's losses to mount by nearly Rs 2 billion every year.

A-I's staff strength -- 18,198 -- to operate 26 aircraft is high compared to other global airlines. While British Airways with a fleet of 249 aircraft employs 55,296 people, Air France has 203 aircraft with 47,343 employees.

Likewise, Singapore Airlines has 75 aircraft and 12,966 employees while Cathay Pacific has 60 aircraft with 15,178 people.

In 1996, the civil aviation ministry suggested that A-I's staff strength should be cut by at least 25 per cent because many employees stationed abroad do little productive work. The ministry felt the airline's commercial activities should be looked after by India's foreign missions.

To begin with, the ministry decided to recall 164 employees from various foreign postings. However, the unstable Deve Gowda government did not evince much interest in the proposal.

If pruning excessive manpower is the only way to cut Air-India's losses, bureaucratisation has led to indecision on the international carrier.

In 1998, the Credit Analysis and Research Limited, commissioned by the Disinvestment Commission, carried out a detailed study of Air-India. 'Along with infusion of funds and downsizing, the national carrier needs de-bureaucratisation of organisational culture, greater freedom to the board of directors and stability in management,' the CARE study said.

Introducing a corporate culture and driving out bureaucratic indecision are necessary for turning around Air-India, it said.

Stating that the organisational culture was not in harmony with commercial decision making, the CARE study called for greater representation to the airline's top management on the board of directors and a reduction in the number of other directors and special invitees.

A-I has seen five chairmen and an equal number of managing directors since 1991. The frequent changes have led to 'shifts' of focus and overall strategy.

The bureaucratisation has led to a delay in acquiring aircraft. Though A-I planned to acquire 23 medium-capacity long-range aircraft, the five-year-old proposal is yet to be cleared by the aviation ministry, the Public Investment Board and the Cabinet Committee on Economic Affairs.

While the bid to acquire MCLR aircraft has made no meaningful progress, the decision to buy an Boeing 747-400 and an Airbus 310-300 has been pending approval since August 1995.

Business News