Arvind Jadhav, chairman and managing director of national flag carrier Air India Ltd, is building a nine-member team to turn around the beleaguered airline after the exit of three high-profile executives hired by its board when Praful Patel was the aviation minister.
Vayalar Ravi was made the Union civil aviation minister in place of Patel in a cabinet reshuffle in January.
Air India, with an accumulated loss of at least Rs.13,300 crore since its merger with Indian Airlines in 2007, had last year hired Austrian national Gustav Baldauf as chief operating officer; a former executive with IndiGo, run by InterGlobe Aviation Pvt. Ltd, Pawan Arora to head Air India’s low-fare carrier Air India Express; and former Deutsche Lufthansa AG executive Stefan Sukumar as chief training officer.
Baldauf and Sukumar resigned while Arora was sacked by the Air India board.
Before the merger, the losses reported by the erstwhile Air India and Indian Airlines were Rs.447.93 crore and Rs.240.29 crore, respectively, Ravi told the Rajya Sabha on 10 March. The carrier has taken on Rs.40,000 crore of debt.
Three directors of the airline K.M. Unni (in charge of aircraft maintenance wing), Vipin K. Sharma (maintenance of engines and components) and S. Chandrasekhar (finance) are the key members of Jadhav’s A team that will drive the turnaround plan prepared by Deloitte Consulting India Pvt. Ltd and SBI Capital Markets Ltd.
“Unni was asked to take over charge from Baldauf and he is the acting CEO (chief executive officer) now,” an airline official said on condition of anonymity.
Jadhav is also grooming executive directors Anil Kumar Sondhi (in charge of information technology) and A.S. Soman (operations and customer services), for bigger roles.
Four other members of the team are R. Dayal, Sunil Kishen, Vijay Paul and K.D. Rao— all executive directors.
The airline has six directors and 22 executive directors.
Jadhav did not return calls of Mint.
“Jadhav is creating a core team to execute the turnaround plan. I am part of the core team and, hence, cannot divulge details,” said one of the members of the team, requesting anonymity.
He said Jadhav has picked senior executives representing critical functions and regions for airline’s operations.
“Investing in talent and building leaders within the organization is an arduous task, but definitely more rewarding in long term. It is motivating for employees to see their colleagues taking on higher responsibility, because this means a chance for them to move up as well,” said Sandeep Chaudhary, regional practice leader (compensation consulting of Asia Pacific region) at human resource consultant Aon Hewitt Consulting.
This is a great way for an organization to create a leadership pipeline, he added.
Air India’s revival plan is modelled on the turnaround of state-run Malaysian Airlines. Its managing director and CEO Idris Jala led the carrier from the brink of bankruptcy in 2005 to record-breaking profits, though he had no industry background when he took up the assignment.
Current chief Tengku Azmil Aziz was part of Jala’s team as executive director and chief financial officer.
In a recent letter to the employees, Jadhav said he is happy because the airline’s persistent efforts during the past couple of years to put “Air India back on track seems to be finally taking shape”.
“The encouraging trend began in November 2010 when your company, after many years, registered operating profits,” Jadhav’s letter, dated 16 March, said.
He expressed happiness on the constitution of an independent committee of external experts to sort out wage parity issues between Air India and Indian Airlines.
“But today I am content because our issues would now not only be taken up for discussion and deliberation, but would also be resolved keeping the best interests of each one of us as well as the organization. We should all, therefore, strive to rise above individual issues and focus on making the organization robust and competitive,” the letter said.
On 22 March, Jadhav again wrote to the employees, saying the external experts, “during the course of its examination, would not only hear representatives of all the unions, associations, guilds and the management, but would also devise a procedure to engage advisers, institutional consultants and experts, as it may consider necessary”.
Mint reviewed both the letters.
Not everyone is convinced about the possible turnaround of Air India.
“The concept of government running an efficient commercial airline business in a highly competitive landscape itself is flawed. Air India had the best talent in the civil aviation before the advent of private airlines. Today, it lacks self-belief as an organization,” said K. Sudarshan, country head of London-based EMA Partners International Ltd, a global executive search firm.
According to him, the government should opt for out-of-box ideas such as giving a management contract to private firms to turn around Air India. “There are many successful public sector undertakings in India, but largely they are in monopolistic business environment. The airline sector is highly competitive,” Sudarshan added.
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