Air India sends its austerity plans up in the winds

It is well known that the national carrier is systemically fleeced by politicians and bureaucrats. Employees, past and present, who have experienced the monumental levels of waste, have also joined the bandwagon.

Stung by record losses Air India has been toying with various measures to cut costs and boost revenues. Most Indians were cynical of true reforms at Air India, and dismissed these ideas as lip service.

The cynicism appears to be coming true. While still waiting for its tax-payer based government bailout, last week Air India issued a diktat that reverses one of the earliest and simplest austerity measures — only economy class travel for all Air India employees, present and former.

The new office order (HQ/79-2/2057) allows employees from General Manager level upwards to travel by business class when they are on duty. In the case deputy general manager rank, the firm basis entitlement is for economy class, but they can be upgraded to business class if there are seats available at the time of boarding.

In an extremely top heavy Air India, this has major cost implications. As if this was not enough, the benefits have been also extended to former employees.

In an effort to sugar coat the new diktat, Air India has indicated the number of seats available for this category on a “firm basis” will be restricted to 25% of the total seats in this class.

As many frequent flyers are aware, airline employees pay only 10% of the fare and are normally accommodated on a “seat as available” basis i.e. a fare paying passenger gets priority and an employee gets to travel only if there is a vacant seat.

However in Air India, 25% of the seats in business class can be reserved for employees of the company who can displace fare paying passengers. Please be rest assured this move going to be a tremendous comfort to potential customers and drive them to the airline in droves.

In case of non-official/holiday travel, the new entitlement allows spouse, parents and children to travel business class for employees of deputy general manager and higher grades. Former Chairman and/or Managing Directors, their spouse, parents and children also get to travel business class at the same highly subsidised fares. Given the hundreds of thousands of present and former Air India/Indian Airlines employees, we can be sure this will ensure a very quick reduction of the losses at Air India.

The serving Chairman and/or Managing Director and spouse will travel First Class even if displacing a fare paying passenger. Knowing him, I would like to believe that Mr. Jadhav is not comfortable with this order, especially his displacing the fare paying passenger part.

The order says

“It is expected that employees will voluntarily give up their entitlements listed above on specific flights, based on the load factors, in the event of last minute arrival of paid passengers,”

Yeah ….. sure!!! We can be sure the current and former employees of Air India, who left no stone unturned in their lobbying for restoration of these cash guzzling benefits at a time of their airline’s greatest crisis, will give them up for someone as inconsequential as a fare paying passenger.

One can only wonder why the government is making a pretence of running the airline. Instead of squandering tax payer money in this highly disguised fashion, Mr. Patel, please give Air India stakeholders (with the exception of the taxpayer) a license to just directly walk up to any Indian taxpayer and loot them. At least we will know that we have been robbed.

About Devesh Agarwal

A electronics and automotive product management, marketing and branding expert, he was awarded a silver medal at the Lockheed Martin innovation competition 2010. He is ranked 6th on Mashable's list of aviation pros on Twitter and in addition to Bangalore Aviation, he has contributed to leading publications like Aviation Week, Conde Nast Traveller India, The Economic Times, and The Mint (a Wall Street Journal content partner). He remains a frequent flier and shares the good, the bad, and the ugly about the Indian aviation industry without fear or favour.

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