Fighting all odds, Lohani has sanctioned salary hikes, small though, for AI permanent employees. This will be the first time in nearly five years that the national carrier will give a 2 per cent pay hike to the employees. The AI has decided to increase the salary after turning operationally profitable in the last financial year.

In yet another far reaching decision, Lohani has been able to convince the government that Air India needs to double its fleet by adding over 100 aircraft, mostly on lease, in the next four years. This will not burden the exchequer. The airline will be experimenting this model for the first time. Mostly, AI has gone for purchase of new aircraft in the past.

These decisions by Air India are being hailed by insiders as well as outsiders in the aviation scene. Lohani is, however, struggling to come out of problems of the past, none of which are of his own making. For example, Air India is saddled with a loan burden of over Rs 45000 crore. Budgetary support is disheartening. Merger of Air India and Indian Airlines has created management issues which are refusing to go away. Instead of creating synergy as expected, the merger has created more problems.
Lohani’s job is cut out. He has to revive Air India with all these constraints. He is trying his best and, indeed, shoots of success are at times visible, like making operating profit for the first time after many years. But this is hardly anything to gloat over.

A financial support of Rs 30,231 crore was approved for Air India in 2012, of which it has received Rs 22,280 crore till March 2016 and another Rs 1713 crore was to be given during 2016-17. The present NDA government is learnt to have decided that the AI will not get any further equity support. This means that AI has to fend for all its needs from its own internal resources. Lohani has tried to cut down costs on various fronts. But aviation being a high flying industry, he has his limitations.

Air India is facing tough competition with airlines like Indigo, Spicejet, Jet Airways, among others in the domestic sector. In the international sector, it is just no match to airlines like Emirates in the Gulf, British Airways in UK or others like Lufthansa, Air France etc in Europe. Yet it is expected to act as a competitor.

Gulf sector has been the singlemost profitable route for the national carrier for the past many years. With private airlines joining the route, AI’s bottomline started shrinking. Even with the best of bilateral deals, Air India profitability in this route cannot go beyond a point. The only way to make more money in this route or others is to deploy newer and more aircraft with latest amenities as given by Emirates. All this will cost money which Air India lacks dismally.

However, now is the time to look up financially when air traffic is growing at more than 20 per cent domestically. Even international air traffic is registering significant growth in this region. In other words, the Government should provide equity support to the airline if it has to compete with others.

Lohani’s hands are tied with limited number of aircraft and huge outgo. AI has 118 planes, of which 41 are wide-body used on long haul and a few domestic routes, 66 narrow-body are used on domestic and nearby international routes, and 11 are regional jets. 77 planes are owned by the airline, 22 were sold and leased back and 19 are leased. There is heavy outgo on leased aircraft.

Lohani knows his limitations. He has been outspoken about his problems like the merger of the two PSU airlines. But he can do little about it. Demerger is out of question. On financial issues, Lohani is reticent. He reports the situation to the Civil Aviation ministry regularly. That is about all. For the Narendra Modi government, civil aviation is no priority area. It also exists.

Overall, Lohani is doing all he could do and more for the national carrier. He deserves support and encouragement. (IPA Service)