More than six months after the current incumbent has finished his initial tenure, and granted an extension till a successor is found, the government is considering the appointment of a committee to find a new chairman for Air India.
The time taken to set the process in motion, after some failed attempts to find an incumbent by following the normal process, is indeed symptomatic of the casualness with which Air India affairs have been handled by successive governments in recent years. Viewed from another perspective, it perhaps shows that the government has no favourite candidate in mind but appears serious in finding a competent leader to steer the airline out of turbulence. The development assumes significance because in the past even a minor stint in the Ministry of Civil Aviation was deemed as having domain experience and considered adequate qualification for appointing him as the chairman.
Considering the current state of Air India, when more than half of the government's Rs 30,000-crore bailout package has been availed of and the airline is still in no position to survive without periodic infusion of funds, one would naturally expect the government to take a call on appointing a chairman with enormous care. As the time for experimentation is long over, the airline can simply not afford a chairman who cannot bring about major changes desperately needed to help Air India survive in today's highly competitive environment.
Even as the intent is good, it is a foregone conclusion that the search isn't going to be easy. Logically, the first area for finding a chairman ought to have been the airline itself. Unfortunately, Air India had stopped producing leaders from within years ago. With a department-oriented career progression system prevalent in the airline and no training imparted or personnel mentored for holding senior positions, most senior management personnel have risen in hierarchy to fill vacancies that were created due to the superannuation of their superiors. Whether the succeeding officer had the requisite capability was never an issue even, as mediocrity ruled supreme. I had, in fact, in the initial years (July 2008) of the airline facing existential challenge written to Raghu Menon, the then chairman & managing director, that a call needs to be taken "as to whether the (management) team we have for shaping the company's destiny is good enough? It is possible that some may have reached the current positions due to sheer luck, seniority, external factors, sycophancy, by default and not necessarily merit". The situation has only worsened since then.
The next probable area is the bureaucracy, on which the government generally relies. Four incumbents with diverse backgrounds and aptitudes in the past 11 years have proven that they are unequal to the job. They can at best be entrusted to ensure the status quo without being able to bring about any significant changes for improving either the work ethics for improving productivity or giving the organisation a commercial, customer-friendly orientation.
They have continued to play around with existing set-ups, policies and systems, not realising that the same factors that brought the airline down over the years cannot help in pulling it out. The strategy has to be different, both in terms of key personnel and policies. The performance in the recent critical years under the leadership of bureaucrats is, therefore, enough of a lesson even for the naive.
Another possible area that can be explored is the domestic aviation sector, with private airlines, in particular. It does not hold promise because many of them have been banking on expats or Indians who have excelled abroad.
The situation isn't grim even if the incumbent with an aviation background isn't available because most successful turnarounds have been achieved by non-aviation personnel. This includes the recent case of Japan Airlines and past instances of US Airways, Thai Airways, Air New Zealand, Malaysia Airlines and so on.
When US Airways went bankrupt twice within three years of the 9/11 attacks, David Siegel and Doug Parker turned it around by 2006, with the former having left a post as CEO of Avis Rent A Car to join US Airways. The story of Thai Airways is no different. Piyasvasti Amranand, an economist from the London Business School with no aviation experience, turned around the airline. Similarly, when Air New Zealand merged with Ansett and subsequently slipped into bankruptcy in 2001, Ralph Norris, a banker, was asked to take charge. Malaysia Airlines collapsed in 2005 when faced with severe competition from low-cost carriers such as AirAsia - a predicament similar to that of Air India today. Idris Jala, a former executive of Shell, was handed over the reins and by 2007, he had Malaysia Airlines back on its feet. More recently, Japan Airlines witnessed a remarkable turnaround under Chairman Kazuo Inamori.
All these airlines, however, had one thing in common: a strong leader at the helm and each of them dealt with the crisis in their own individual ways. Air India needs one such leader. But can it? One wonders if the government is wishing to get an incumbent at its scales of pay, which are unlikely to attract the best talent, or is willing to offer a handsome compensation package linked to market standards that can entice the best to lead the airline. The issue needs to be resolved before embarking on a search mission: else the entire exercise can be rendered futile and Air India could slip still further, as time is of the essence. The realisation has to dawn on the policy-makers that Air India is not just losing out on account of its own actions and inactions but also because other professionally managed airlines are going past it due to their superior performance.
Simple, but needs reiteration because at times the obvious gets overlooked in our sarkari system.
The writer is former executive director, Air India and author of The Descent of Air India
Twitter: @jitibhargava
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper
