April 20, 2024

Criticism of State-Owned Air India Grows

“All you had in the cockpit was this yellowish glow, as the light permeated the newspaper,” Mr. Haygooni recalled, saying it was a visibility hazard he had never seen before in 30 years of flying.

But “this was a normal thing at Air India,” said Mr. Haygooni, a former United Airlines pilot who flew for the Indian airline for 16 months. In April 2010, however, he decided that the paycheck was not worth his concerns over what he considered the government’s haphazard approach to running its state-owned airline.

Interviews with more than a dozen experienced pilots hired in the last three years by Air India to work new international routes describe an airline with problems. But theirs are not the only complaints.

Passengers have abandoned Air India in droves, shunning the airline because of its reputation for poor customer service and late flights.

Formerly this nation’s monopoly carrier, Air India has been surpassed by three commercial Indian airlines — Jet Airways, Kingfisher and IndiGo — among those that have sprung up since India deregulated the domestic industry nearly two decades ago. Air India now has less than 15 percent of India’s domestic air travel market, with many empty seats on the flights that do take off.

As a result, Air India lost more than $1 billion in taxpayer money in the last fiscal year. And now there is a growing public clamor for the government to get out of the airline business.

“Instead of throwing good money after bad, the time has come to stand up and say: yes, Air India must be shut down,” the newspaper The Indian Express said in an editorial earlier this month. While few government airlines in the developing world have stellar reputations, the Center for Asia Pacific Aviation, a research group in Sydney, Australia, singled out Air India as an example of government mismanagement.

“There are other state-owned airlines in other emerging-market countries that have similar problems, but I can’t think of one as bad as Air India,” said Peter Harbison, the center’s executive chairman.

Well-run state airlines tend to be a product of “enlightened and intelligent leadership,” Mr. Harbison said.

He cited Indonesia’s national carrier, Garuda, which had been a debt-strapped airline with a fleet of unsafe old planes that regulators in Europe refused to let land there. But under a businessman, Emirsyah Satar, who was named chief executive in 2005, Garuda Indonesia has been transformed into a profitable company that raised $350 million in a public offering this year.

Spokesmen for Air India defend the airline as safe and say it is working to correct its problems.

And the nation’s new civil aviation minister, Vayalar Ravi, vowed in an interview Wednesday not to close or sell the airline. “There is no question of Air India being shut or privatized,” he said. He said vested interests who “want to exploit the people for their own profit” were behind suggestions that India’s government give the airline up.

Still, Mr. Ravi said the airline had been mismanaged in the past — including the merging in 2007 of India’s domestic and international state-run airlines. “Nothing positive came out of the merger,” he said, and Air India has bought too many planes.

But the airline does “not make any compromises with maintenance and security,” Mr. Ravi said.

Air India’s image was not helped by a recent 10-day pilots’ strike over salaries. It ended with a government pledge to raise pay — but not before the work stoppage had caused cancellation of nearly 1,500 flights and added almost $50 million to Air India’s mounting losses.

Hoping to win back customers, Air India is slashing fares and planning to expand, even though it loses money on 95 percent of its flights. Analysts say the prospect of a fare war threatens to destabilize the entire Indian airline industry, and to erase the previous predictions by private carriers of profits this year.

Even some once loyal customers are giving up on Air India.

“I think all Indians should just boycott the airline,” said Harjiv Singh, co-founder of Gutenberg Communications, a public relations company with offices in New York and Delhi.

Hari Kumar contributed reporting.

Article source: http://www.nytimes.com/2011/05/26/business/global/26airindia.html?partner=rss&emc=rss

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