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How the Air India Management gave away a 100 Crore per annum route to benefit private carriers, even though the staff warned them not to.

Air India management withdrew flights from the lucrative gulf sector to allow private players a free run, even though the staff warned them not to.

Samiran Saha - Tehelka
New Delhi

THIS is a story about how financially crippled Air India (AI) chose to arbitrarily withdraw from a sector that earned the carrier as much as Rs 100 crore per annum. AI literally squandered the sector without any rationale whatsoever. The moment Air India vacated the sector not only other carriers lapped up the sector but significantly increased flights on this sector.

Despite being saddled with accumulated losses to the tune of Rs 40,000 crores Air India opted out from the Kozhikode-Doha-Baharin sector where it operated flights coded IC 997/IC 998 on October 24, 2009. This was one of the most profitable routes for the carrier. But a one line e-mail left the station managers aghast as to why the airline chose to opt out of the sector, which was virtually a cash cow for the financially crippled airline.

The one line message from manager (scheduling) stationed in Mumbai in an e-mail to all concerned sent out a letter on October 8.2009 that said, “It has been decided to withdraw the flights IC 997/IC 998 operating on the CCJ-DOH-BAH (Kozhikode-Doha-Baharin) vice versa permanently from October 24, 2009.”

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The letter asked the stations to transfer those passengers booked on these flights to Air India Express (then low-cost arm) flights

A copy of inter-office communications in possession of FW clearly stated that the sector was handed over to competitors on a platter and no plausible reason was assigned by the AI management for withdrawing from the sector.

AI officers stationed in these sectors when contacted said: “We have no idea why such a damaging decision was taken despite the fact that the sector earned the maximum revenues for the airline. We wrote several letters to the management but to no avail. Our competitors are now enjoying the benefits of flying on this sector that has a vast client base that we have left for them.”

Facts ignored by AI

• Passenger loads of Air India Express showed a large demand. With 511 seats short per week, we (AI) handsover a ready market to a competitor

• (We, the employees) request you to kindly re-look at your proposed changes. The airline is certainly not going to benefit from this

• The route catered to both the labour and up market clients. It was among the highest revenue earning flight

Before the flights were permanently withdrawn from the sector, dated 19 September, 2009, a copy of which was also marked to the Chairman and Managing Director (CMD) of AI, Arvind Jadhav (see copy 1 of the letter) the officials posted in the sector articulated how withdrawing from the sector would lead to enormous losses for the airline. But their pleas went unheard. One of the point in the letter to the CMD and top management stated, “Present loads of IC and IX (Air India Express—the low cost arm of Air India) show that there is a large demand. With 511 seats short per week, we handover a ready market to a competitor.”

Despite such a strong worded letter from the employees on the ground AI withdrew from the sector.

The employees in their letter further said, “(we) request you to kindly re-look at your proposed changes. The airline is certainly not going to benefit from this.”

Later on 26 September, 2009 the employees again wrote to the management and marked a copy to the CMD regarding the impact of the withdrawal of the flight. (see the copy of the letter). The letter stated, “Jet Airways proposes to restart operations from BAH-DOH to CCJ. Ethiad is increasing flights from 3 to 7 per week from CCJ (Kozhikode) to DBX (Dubai)”

Finally the letter stated, “A readymade market is being handed over to other airlines. Result: Financial loss to the national carrier.”

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