Merger-related issues still haunt Air India, says MD Ashwani Lohani

Lohani says AI is competing with the private airlines and its presence is being felt

One-and-a-half years into the job of turning around the national carrier, Air India's chairman and managing director Ashwani Lohani tells B Dasarath Reddy old merger-related issues still haunt the company and the old debt is still there. Excerpts: 

Have things changed in the last one and half years? 

It is all about improving the organisation's culture. That is the most important thing. But culture can’t be changed overnight. It takes time, years to change the organisational culture. But we are moving in the right direction. Staff is definitely on board in this endeavour. Manifestation of staff grievances has been reduced and staff has some faith in the management now. They believe my words.

How will the financial performance of Air India be this year?

We are going through the difficult times on two counts; old merger-related issues which still haunt the company and the old debt which is still there. We are still in the process of finding solutions to these issues. But we have decided to consolidate as well as expand our business. Consolidation basically means running more flights with the same aircraft and the expansion would involve buying more plans. We are moving in both directions. We have to improve our market share as well as revenues. We had posted operating profit last year and this year, hopefully, we should have an operating profit, though the difference between the operating and the net profit would be very heavy.

Turnaround would also depend on the company's ability to compete with the private airlines on various fronts...

We are competing with the private airlines. Our presence is being felt. They can not wish us away. And we are coming out with new schemes every day and we are also launching new flights. We launched a Delhi-Kochi-Dubai flight and we are going to start some more flights to Washington, Toronto, and some destinations in Africa soon.

Will it be possible to continue fare wars in the light of surging oil prices?

We can set things right with what we have in our hands and that is what we have been doing so far as the oil prices were low. This year the oil prices started rising. Airlines business is a very difficult business and margins are very very low. So these realities will determine the contours of a business strategy.
 

Finance Minister Arun Jaitley has announced Rs 1,700 crore capital infusion for 2017-18, over Rs 1,000 crore less than what you asked for. How would you manage?
 

This is only the first instalment. We will ask for a supplementary budget if required. 

What are the key things you are looking at in improving Air India's business performance?

We have to become more aggressive in marketing and selling. We are trying to become more aggressive as much as the systems permit us because we are a government-run company. We are putting our efforts to improve the services. We are trying to improve punctuality. We are trying to introduce our services in the new routes. Besides this, Air India has chalked out aggressive plans in regional connectivity. We have just placed orders for 10 ATRs and we will fly them to Tier-II and Tier-III cities.

Air India has decided to hike salaries by two per cent this year. Given the financial situation, will the company be able to take this additional load?

We are giving what was already agreed in view of the operating profit achieved in 2015-16. Moreover, we cannot consider this as a load but a move that will bring more money to the company in coming days.