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The awfully awkward state of civil aviation in India can hardly be a tough case study at the management institutes. To decipher the 'why' of it is as simple as connecting five dots. Dot one; 'deficient govt policy' (on capital structure, ideal promoters, structural incongruities, operational aspects), dot two; 'absence of stern govt orders' (led to suicidal buyouts and senseless pricing - - after 10 years of being the unconcerned spectator of the sinful practice govt is now thinking of fixing minimum prices across routes, very bad approach to deal with it though), dot three; 'immature airlines' Jet Airways and Kingfisher Airlines make good case examples for deficient business and marketing (branding) strategies), dot four; 'politically obedient govt banks' (public money wasted on Kingfisher makes them illiterate about professional lending, 14 of them), dot five; 'over reach of politicians' (the root cause for all the other dots).

 

  23 December 2014

Isn't the ministry of civil aviation guilty? SpiceJet turns the question serious

Published in: governancenow.com - on 23 December 2014         

To say it right and straight, SpiceJet's breathlessness simply puts 'all' in the 'Ministry of Civil Aviation' on the bench. One obnoxious sounding question; - is that not the right thing to do? And some in support of that; - is there a single fit policy decision or a sterner actionable stipulation or any worthwhile industry management direction that the ministry has ably administered over the many years the industry has been struggling perpetually? Or, has it reversed its own wrong policies, approach and worse fixed its own managerial deficiencies that indeed hurt the industry - to undo the wreck? A simpler one; can the ministry which has not been able to run its own airline profitably or, as perceived generally, has not allowed it to run profitably, help evolve the industry out of the trappings all created by the impropriety, as it is often accused of, and / or incompetence of those who were vested with the responsibility to live up to that trust? The boring reports in the media on the sector sickness over the years squarely points out absolute absence of rightful actions which the ministry seems to have covered up with petty stipulations and prolonged sigh of helplessness for years now, govt after govt, including the present one.

Irrefutably, as evident in its gossip with the media, as usual, the ministry appears grossly confused about what it wants to achieve, often expressing its indecisiveness on issues complex and even simple. 'Spicejet' only happens to be another new hard ball that is troubling the ministry. Howled by the media with the 'why-the-bailout' questions the minister of state in the ministry had to press the 'Esc' button by saying "we are not offering any bailout, we will put up their case to the PMO and other ministries to decide on that".

Read:  Is the civil aviation minister complaining?

The awfully awkward state of civil aviation in India can hardly be a tough case study at the management institutes. To decipher the 'why' of it is as simple as connecting five dots. Dot one; 'deficient govt policy' (on capital structure, ideal promoters, structural incongruities, operational aspects), dot two; 'absence of stern govt orders' (led to suicidal buyouts and senseless pricing - - after 10 years of being the unconcerned spectator of the sinful practice govt is now thinking of fixing minimum prices across routes, very bad approach to deal with it though), dot three; 'immature airlines' Jet Airways and Kingfisher Airlines make good case examples for deficient business and marketing (branding) strategies), dot four; 'politically obedient govt banks' (public money wasted on Kingfisher makes them illiterate about professional lending, 14 of them), dot five; 'over reach of politicians' (the root cause for all the other dots).

The kind of spoils in the sector compels one to wonder; of the work and the larger purpose of the ministry. If the job is to evolve polices towards healthy growth of the sector, make stipulations and control wayward companies the ministry obviously has done nothing for all these years. In the UPA reign the ministry sounded like a consulting firm for private airlines and was unduly involved with them who in turn misused that weakness resulting in bad debts in the govt's banks. The ministry's inclination to give in to the articulations of 'SpiceJet' in spite of the bad experience with Kingfisher is simply appalling.

The right solution for about nine out of ten absolutely rundown businesses is to shut. And in unprofessionally managed sectors efforts to save dying companies would only delay the eventuality at rapidly progressive cost. Therefore in the case of SpiceJet govt's responsibility happens to be only about helping out the employees to cross over should it fail to recover on its own which should not be a hard task with the new better endowed companies venturing in.

If the new airlines indicate sound management and sensible competition Air India stands no chance of revival. As said, more time the govt would waste in setting up, once tried, committee to think up 'what-to-do' lesser shall be salvage it can expect. Nonetheless, if the govt would hire 4 full time super managers who have proved exceptional on challenges into an all powerful and all superseding management board which would have absolute authority to run the airline with a six quarters timeframe to turn it good enough to get funds flowing-in on the equity-convertible preferential route by quarter 5 even the new well endowed entrants could feel nervous.

Senior minister Mr P Ashok Gajapathi Raju needs to take the call on Air India well before the thin chance evaporates.

Read:  Upgrading Governance the case of air India

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Adve Srinivasa Bhat

Management Consultant

 
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