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AI to spruce up services, cut costs

AI to spruce up services, cut costs
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First Published: Wed, Jun 09 2010. 09 10 AM IST
Updated: Wed, Jun 09 2010. 09 10 AM IST
Berlin: The new chief operating officer (COO) of National Aviation Co. of India Ltd (Nacil), Gustav Baldauf, said on Tuesday the turnaround strategy for flag carrier Air India will rest on the twin pillars of cutting costs and an increasing focus on customer services.
Baldauf, an Austrian and the first expatriate hired by Nacil to a key post, is no stranger to India’s civil aviation industry, having worked with the country’s largest private sector airline Jet Airways (India) Ltd as its vice-president (operations).
“Air India is currently carrying out several fuel efficiency steps. I will certainly continue with that. I will give more focus on customer services. That will be one key area that will bring Air India back to black,” he said on the sidelines of the 66th annual general meeting of the International Air Transport Association (Iata) in his first interaction with the media since taking up his new job.
Baldauf, who was executive vice-president (flight operations) at Austrian Airlines till recently, was granted an employment visa and work permit on Monday.
On the second day in his new assignment, a confident Baldauf said he’d need three years to turn around Air India.
His appointment as COO is one among a series of steps that the Indian government has taken to revive an airline that piled up a cumulative loss of Rs8,461 crore till fiscal 2009. The net loss for fiscal 2010 is estimated at Rs5,400 crore.
“Apart from India’s potential, I like India and I know India. This is a big personal challenge for me. I have to take up something big in my life and make it successful,” Baldauf said. “We need to make a three-year plan for turning around Air India. We will have to put an operational and financial plan together to make a clear road map.”
Arvind Jadhav, chairman and managing director of Nacil, said Baldauf will closely monitor day-to-day operations and initiate efforts to restructure routes.
The recently inducted independent directors of Nacil have already met Baldauf and approved his plan of action.
Anand Mahindra, vice-chairman and managing director of Mahindra and Mahindra Ltd, Federation of Indian Chambers of Commerce and Industry secretary general Amit Mitra, Ambuja Realty Development Ltd chairman Harsh Neotia and former air force chief Fali H. Major joined the airline’s board in March as part of a plan to restore the loss-making national airline to financial health.
Wolfgang Prock-Schauer, former chief executive officer (CEO) of Jet Airways and current CEO of BMI (British Midland Airways Ltd), said Baldauf has sound knowledge of flight operations and a great sense of responsibility. “In fact, I had invited him to India for Jet Airways when I was CEO. He is the best among the lot,” said Prock-Schauer, who is also an Austrian national.
Baldauf plans to closely work with the airline’s employees.
“All information on the turnaround will be shared with the employees first before we make it public. I will also work closely with the unions,” Baldauf said.
The global positioning of Air India and its potential attracted him along with his affinity for the country. “There is nothing I dislike about Air India,” he said.
He doesn’t view the government as a source of disruption.
“If you are asking about interference of the government, let me tell you that they wanted to turn around Air India. So they brought me. They also inducted independent directors. Therefore, we can work quicker and easier. Moreover, I am going to take care of the operational issues,” he said.
Not everyone is convinced. Nawal Taneja, professor and chairman at department of aviation, Ohio State University, is one of them. According to him, unless Air India gets its act together, it will always remain in the clutches of the Indian government. It needs more strategic changes in its network, fleet, operations and planning.
“It isn’t just about picking up a business leader; it’s about the government allowing him to perform. If the government picks up somebody and ties his hands, the company will suffer,” said Taneja, who has 40 years of experience in the business and has advised airlines across the world.
Baldauf is aware that the pace of decision-making at Air India may be slower than at Jet Airways, where he was employed earlier.
“But you would see the results. Air India’s vision is to become the brand ambassador of growth. We are in the process of putting a mission before us,” he said.
The plan is to connect to capitals of various countries. Baldauf, who will submit his revival plan to the government soon, declined to divulge details.
Civil aviation minister Praful Patel said the formalities of appointing Air India’s COO were complete and that “the worst was over” for the airline.
P.R. Sanjai was in Berlin as a guest of Iata.
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First Published: Wed, Jun 09 2010. 09 10 AM IST