Singapore: Ailing Air India needs an effective administrator with full powers and political backing to take urgent decisions for a turnaround, a top global aviation official has said.
“If you delay it (merger of human resources of the two erstwhile carriers) further, it becomes a mess. Between Indian Airlines and Air India there are many (salary) grades. If it doesn’t integrate well, then it becomes a nightmare”, Iata chief Giovanni Bisignani told PTI.
To questions on the acute problems faced by the Indian national carrier, he expressed “disappointment” over the crucial pending issues relating to the merger of the two former state-run airlines and said “there has to be a political consensus because it has to happen fast”.
The merger, including integration of employees, “is something to be handled in a very effective manner. Put an administrator with full powers. It has taken too much time.
“The administrator should take full responsibility to take tough decisions. But the decision has to be a political decision. Therefore, the (administrator’s) decisions need political support”, the Director General and CEO of global airlines’ body International Air Transport Association said.
“Give, say, six months time to it (administrator to take decisions). But before giving any time-frame, make the airline smaller and efficient”, Bisignani said.
“I am not giving any advise. But this limbo situation cannot be allowed to continue for long. It is a problem for the passenger, the airline as well as the government as it continues to burn the national budget. It also creates problems for safety”, he said.
Observing that it was “much more easier to restructure when the aviation market is growing” in India, Bisignani said it was important for India to “have a big national carrier. The country has to give its national carrier a chance to play a role.”
The Iata chief gave examples of good and bad mergers in the airline industry, saying there was “a great history of failures also.”
Referring to the 2001-02 merger of Japan Airlines (JAL) and Japan Air Systems (JAS), he said the two airlines later sought government protection due to near bankruptcy situation.
But these airlines were small in size, and therefore the problems were less than those of Air India, he said.
To questions on the growth in the aviation sector in India, the Iata
chief said the growth in infrastructure was slow but picking up. “It has been slow, but much faster than in Europe or the US” as those markets grew over time while the growth in India was very fast.
While India was the sixth largest market in numerical terms, the Chinese market was 220 million in absolute terms. “It is almost four times than India. Indian market is big and has tripled in five years but still small in numbers”.
He also said that India had “more problems than in China where you take a decision and implement it”.
While the Indian market has tripled over the past five years, the markets in China and Brazil had doubled during this period.
On the domestic front, India and Brazil showed the strongest domestic growth of 25.6 and 23.8 per cent respectively, Bisignani quoted Iata figures as saying.