Air India would like to restructure the entire loan: Ashwani Lohani
Days after civil aviation minister Ashok Gajapathi Raju Pusapati announced on twitter that Air India has earned an operating profit of Rs 105 crore, DNA Money caught up with Ashwani Lohani, airline's chairman and managing director, during his recent visit to Mumbai. Lohani is nicknamed 'turn around man' after his earlier successful stints with the Ministry of Railways, Madhya Pradesh State Tourism Corporation, among others. In an interview with Shahkar Abidi, he spoke at length on various topics ranging from profitability, lack of pilots, induction of new aircraft and starting of new routes. Edited excerpts.
Q. Air India recently announced earning an operational profit based on decreased fuel prices and increased passenger demand. Considering that the airline has a debt of over Rs 50,000 crore, is the airline management or the government happy about it?
A. We do not need to go chest thumping about it as at the end of the day it is just operating profit for the year. We still have a huge debt to service which takes away Rs 4,000 annually. None-the-less, our performance has improved and a lot still needs to be done to improve it.Q. Air India will soon be inducting more aircraft for expansion. Last time, around a decade ago, there were allegations of corruption and kickbacks when the aircraft were purchased...
A. I can only say that the orders for planes which will be inducted now had been made earlier and it is just that the delivery will be happening now.Q. Poaching of pilots is an issue in the industry, with scores of pilots leaving the airlines including from Air India to join rival airlines, especially those from the Gulf. Further, Air India will be inducting new aircraft every month in the near future. How do you plan to tackle the situation as any shortage of pilot means more aircraft shall remain on the ground? Will you also opt for poaching?
A. In this year, we will be adding about six wide-body planes and around 10-12 additional A320s and 10 ATRs. In addition, there is already some shortage at present. So considering everything, we need around 300-400 pilots in the coming years and the process of recruitment is already on. However, we shall not indulge in unethical businesses of poaching as that would also not be good for the industry as a whole. We would rather like to see availability of enough pilots in the market for all the airlines.Q. Threatening by pilots to go on strike and ground the planes over not meeting certain demands has been an issue with the airline. Also, the airline management had come with a circular stating that if any flight gets delayed because of the fault of the staffer, the losses accrued out of it will be recovered from that employee. Kindly state what action have been taken in this regard so far?
A. Staff behaviour is just a symptom of problems in an organisation. By just declaring a diktat will not change the behaviour of those people who have issues. Earlier, if an employee had done anything wrong worth grounding still he/she could not be grounded as that would mean grounding the aircraft due to staff shortage. Now, we are on an expansion plan and are growing. I want to get into a situation, whereby I don't have to consider the consequence of grounding the erring staffers.Q. Of late, it looks like Air India is trying to come with a well-laid media strategy. The promotions, social media, advertisement wars are all there to see. Please comment.
A. The image perception is very important in branding and therefore we are just trying to bring out a good image to the public. As an airline, earning higher revenue is also very important to us. How will more passengers come to us? They will come to us only if we have a good image as an airline and media plays a very important role in it. Interestingly, earlier when I joined the company, only negative reviews of the passengers and others would come to me. That has now changed with even some positive reviews coming.Q. As part of its turnaround plans, the national carrier had drawn plans to monetise its properties to garner over Rs 5,000 crore. How successful has been the plan so far?
A. We have monetised some properties including the Nariman Point building of the airline. Many of the floors in it have been given on lease. But then, talking as a whole, the success is not as much as we would have like it to be as many other properties still have not been monetised.Q. There have been reports that the airline is in talks with the banks for restructuring of loans. How much of restructuring are you looking at ?
A. The talks with the banks are at a preliminary stage and so far, nothing concrete is on the table. The debt and the interest servicing is huge. Keeping the long-term planning in mind, we as a company would definitely like to restructure the entire loan. It may take some time before things start moving.