Deep in debt, Air India chairman Arvind Jadhav has to keep AI afloat and face growing distrust of employees

MUMBAI: He might have won the battle, but he's some distance away from winning the war. Some 800 pilots of national carrier Air India have called off a 10-day strike although their demand for the removal of chairman & managing director Arvind Jadhav has not been met. But Jadhav has little reason to celebrate. Like many of his predecessors, he has his task cut out - a task that keeps getting more Herculean and elusive with every passing day.

Air India is saddled with debt of Rs 40,000 crore, Rs 19,000 crore of which are working capital loans. Accumulated losses have burgeoned to Rs 13,000 crore - the strike contributed another Rs 150 crore in losses - with employee salaries and cost of operations totally out of whack with aviation norms.

Can this IAS officer from the 1976 batch pull off a miracle? Jadhav's immediate priority if he has to keep Air India afloat is to ensure a booster shot of at least Rs 10,000 crore in equity. The government, which has infused Rs 2,000 crore into the ailing airline in the past two fiscal years, may not be in mood to oblige this time around.

Along with equity, Air India needs an injection of confidence. That's a scarce commodity at the airline with many senior executives having little faith in the CMD's abilities and intentions. A proof of this is that the CMD's office asked the executive directors of the company to sign a letter supporting Jadhav last week.The former joint secretary in the power ministry was assigned the Air India mandate on 1 May, 2009, has little to show for his efforts two years down the line.

"He (Jadhav) is no different from his predecessors who came, criticised the company and left it in deeper mess," says a veteran at Air India who has been with the airline since its glory days.

So, what is it about the CMD that provokes employees to react so bitterly? A section of executives loves to point to his displeasure with dissenting voices and what they perceive to be a high-handed attitude. Austrian Gustav Baldauf, who had joined as chief operating officer last June and left earlier this year, might have been a victim of that attitude. The COO had a business plan to turn around the airline but he could not get a free hand to implement it.

"People manning positions of importance may not be the right people for those positions," Baldauf told ET a few days ago. In an earlier interview to ET, Baldauf had said there are power centres within Air India that will not let the airline progress as these power centres have selfish interests.

Jadhav's lack of success is amply visible on the human resources front. Baldauf says Air India is a huge "man management" problem. "Air India's problems are not resolving as the human resource issue have not been tackled," he adds. For instance, employee concerns arising out of the merger of Air India and Indian airlines have been dealt with insensitively without any dialogue, says the former COO.


Those who have observed the CMD's style of functioning point out that he belongs to the old school of bureaucrats who thinks that most of the woes in organisations are administrative problems and not people-centric issues. However, at Air India, a workforce of all of 30,000 is its core. It is also the airline's bane, what with Air India having 240 employees per aircraft as against the industry norm of 125 employees per aircraft.

What works in Jadhav's favour are his oratory skills, which indicate a sense of purpose - and a willingness to change and give Air India a contemporary and relevant look. But getting through to the man is indeed difficult as we also realised trying to reach him for a comment for this story for his views. There is ring fencing done by his advisors, wrongly or rightly that time will only tell.

And the Air India employees no wonder feel marginalised because of his attitude to just clamp down.

"We did not have cutting edge IT technology earlier. Now we do," said Jadhav had said earlier in Mumbai while addressing a gathering when launching a common ticketing engine for Air India and Indian Airlines.

He pointed to common ticketing systems and real time web-based bookings as evidence of the technology edge. "We need to be seen on social networking sites like Facebook; we need a modern face for Air India for a generation that needs everything within seconds," Jadhav had said.

That doesn't convince Jadhav's detractors who are liberal with slurs that include giving favors out of turn and being more absorbed with his own interests than those of the airline. For instance, Jadhav's insistence of operating out of Delhi and not Mumbai - where Air India is headquartered, has also irked a lot of people. "He is in Delhi to manage the government and not the airline," said a senior Air India executive.

But the Delhi weather may not be too pleasant these days, what with a campaigning civil aviation minster Vyalar Ravi reportedly expressing his ire against the CMD for misreading the pilots' strike. That the government - and not the management - went ahead and negotiated with the pilots may also indicate that all is not well between the ministry and the CMD.

The minister for his part has always dodged the question of Jadhav's removal. Turning around Air India would be a challenge for any management. Jadhav's task has only got tougher because of the growing distrust between him and the airline's employees.