Treat Air India as a commercial airline, not a national carrier

In December 2005, state-run Malaysia Airlines had cash to support just four months of operations. Two years later, it posted a profit, following a dramatic turnaround. India’s national flag carrier Air India Ltd is now almost in a situation which Malaysia Airlines was facing in 2005. The airline’s managing director (MD) and chief executive officer (CEO) Idris Jala led the carrier from the brink of bankruptcy to record-breaking profits though he had no industry background when he took up the assignment.
Tengku Azmil Aziz, current MD and CEO, was part of Jala’s team as executive director and chief financial officer. Aziz recounted in an interview the transformation of the airline, a business strategy that Air India can emulate. Edited excerpts:
Malaysia Airlines’ turnaround story could be an inspiration for Air India. Could you share the experience?
Yes, the situation was similar to Air India. If I rewind to 2005, we had then reported a record loss in the airline’s history. There were a lot of challenges when we were making business turnaround plan. We needed to do something radical; not something better. The 47-page plan was unconventional in every aspect.

What was that?
We were very upfront in publicizing our ambitious targets. People were puzzled and called us nuts. They alleged that the CEO was not from airline industry. Our idea was that everybody should know about what we are doing. So that you cannot hide behind numbers. Our plan was to cut the losses to half in the first year; break-even in the second; and profits in the third year. But, by second year, we made record profits.

How did you do that? Air India has a 100-page turnaround plan.
There is no single solution. A turnaround comes from disciplined action. The question was what we can do to get it done rather than why it is not happening. Jala galvanized us. There was unifying spirit and our goal was very clear.

How did the employees react? Air India had faced stiff protest from employees.

There was a town hall meeting where we explained everything to employees. Somebody asked us about the Plan B. Our CEO said there’s no Plan B. This is it. He told them that either we make it work or we lose. After that, everybody was aligned. None wanted the airline to go down. The whole philosophy was about to do everything in 47 pages, irrespective of doubts about success or failure.
07/02/11 P.R. Sanjai/Live Mint

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Categories: Air India Feb 2011