Meru, Air India and Kingfisher – Sleeping Regulators, Greedy Managers and Cunning Politicians

/ March 22, 2012 / 4 Comments / Uncategorised

There are three news reports about strikes. When read individually, those may sound as very routine stories, but when read together they present a terrible picture of our society.
The first story is of Meru. They have done pioneering work in establishing Radio Taxis in India. The drivers enter into a contract with Meru and it is a contract for service and not contract of service. There is actually nothing new which Meru has done. Such Radio taxis exist almost all over the world and all follow similar if not same contracting with drivers.
This means that Meru is not the employer of the drivers. The drivers are actually ‘contractors.’ As a consequence, the drivers are not workmen and do not enjoy protection of the Industrial Disputes Act. But given the psyche of drivers who are usually not well read, they cannot see anything else than an employer-employee relationship. The political leaders however understand the difference. And certainly the foreign educated son of Narayan Rane who leads Swabhiman understands this aspect. But they have a vested interest in fomenting trouble for political gains. Most of the drivers are not locals, they belong to the North belt and so out went MNS and Shiv Sena unions which had organised the drivers earlier under their unions. Nitesh Rane is cleverly recognised this opportunity to build a political base.
And adding fuel to the fire is the MMRTA or Mumbai Metropolitan Region Transport Authority which is notorious for not deciding the Auto-Taxi fares quickly after any price rise. This invariably leads to strikes which Mumbaikars have got used to. Whether they are accountable and to whom is another story, but it is a story of simple neglect and dereliction of duty. Since they have not revised the fares, one would have expected that Swabhiman would take up the issue with MMRTA. But no! This is what the new report says….
K K Tiwari, president of the Swabhiman Taxi Rickshaw Union, said: “Drivers have to pay a fee to Meru every day. Either the fare be revised by Re 1 per km or the charge levied by the management be reduced to help the drivers reduce their losses. The strike will continue till our demands are met.”

If Meru discontinues its operations, which I hope they will not, it will be the insouciance, and vested interests of political ‘leaders’ and the negligence of MMRTA which will have to be blamed.
The second case is that of Air India whose pilots have threatened to go on strike if their salaries are not paid immediately. Actually many have not been reporting for duty. The Air India story is too well known. No salary for three months is a bad situation indeed. Corruption at all levels, not just in Air India but also including their bosses in New Delhi, complete mismanagement of merger of the two airlines are factors that have led to this situation. Who is really responsible? Air India employees presume that the airline will not be closed down. Given the vested interests that are involved, and also political considerations, they may be right in their assessment. So taxpayers will finally pay for the greed of who’s who in Air India and in the Government of India. Greed, vested interests of political leaders and neglect are the factors that are bringing down this airline.
   
Air India plans to have smaller companies to handle various operations. This means that many employees will be moved to different companies. While such a move may be justifiable on commercial grounds the ability of Air India to manage any change is a big suspect. It will also cause untold worries and hardship to employees who are already worried about the future. The average age of Air India is quite high meaning there are many who are in the higher age groups. Impact on them at this juncture of their life is going to be an unbearable hit.
   
Kingfisher Airlines is a classic story of mismanagement. This is what Anjuli Bhargava says in her story on Kingfisher “Kingfisher Airlines chairman Vijay Mallya, of course, pointed to the various negative factors that his airline was battling. What he seems to ignore is that all these factors apply to the other airlines as well. Sure, oil prices have risen, but they have risen for all the airlines. Taxes on air turbine fuel remain an issue, but every other airline in India pays the same. And foreign direct investment has not happened for any of them. So, if he finds himself in a unique situation, he has only himself to blame.

Mallya has confused business models — low-fare and full service — time and again, and he has paid the price for that. He has never had a proper management team or chief executive in place (and if rumours are true, Sanjay Aggarwal, the CEO who joined in 2010, will be with Mallya only up to March). Instead of focusing on making his operations more efficient, Mallya has — without any compunction — relied on his political clout and influence to convince Indian banks to bail him out. No matter what he says, it is a bailout that he has got. No banker in his right mind would agree to fund his unviable and inefficient company unless it happens to be a government-run bank such as State Bank of India. Can anyone tell me how much exposure Standard Chartered or HSBC have to this airline? How come they are not losing sleep over keeping Kingfisher flying?……..

…..And no one should look at the Directorate General of Civil Aviation for steps such as cancelling the airline’s scheduled operator permit and so on. In a country like India, he will be kissing goodbye to his job (and his career) if he starts taking strong, decisive steps like this. It is not even up for discussion.”

The management practices of Vijay Mallya’s companies are not written about because he has both – money and power! But his views on managing a company are gulped down with a smile on face. Greed plays a part there too and corruption is not a monopoly of the babus in New Delhi. The only smart move Vijay Mallya is making is not investing in his own airline in spite of having literally tonnes of money. Captain of a sinking ship goes down with it but not of an airline – he perhaps will fly higher!
What is happening to the pilots and other staff of Kingfisher? Many left and joined Indigo. But Indigo has stopped recruitment. So others have no choice but to wait for their luck to favour them. And some pilots have threatened to go on a strike. It will not help. There is a big fall in social status for Kingfisher employees, though the same can not be said of Vijay Mallya.
Greedy, irresponsible people have caused a great damage. MMRTA and DGCA will not act. Nitesh Rane can hold Mumbaikars to ransom. Mallya is having a great time, and all Aviation ministers have behaved as if they owned the airline. And nobody is listening!!
Vivek
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