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Three days to save Air-India

Syed Firdaus Ashraf in Bombay

Come December, 40 year-old Malathi Narayan (name changed on request) will take piano and guitar lessons three days a week instead of doing her 9-to-5 routine at Air-India's head office at Nariman Point in south Bombay.

Malathi is not alone. Many of her colleagues are going to be involved in other engagements, assignments, or hobbies on normal working days.

Air-India is introducing a three-day workweek, on a voluntary basis.

"It is a good break that I always wanted," says Malathi who joined Air-India in 1981. "I always wanted to learn music and do social service. But my busy schedule left me no time for these things."

Like Malathi, many working women feel the three-day workweek option is a god-sent. All those who opt for this scheme will have to work three days a week for 60 per cent of their salary. And after two years, they will have the option of rejoining on a full-time basis.

Air-India has been in the red since fiscal 1995-96. In its 50 years of operation, the airline has suffered losses only seven times. But, more significantly, the company has suffered losses for three years in a row now.

In 1993-94, the airline posted a profit of Rs 2,019 million. But thereafter it began suffering setbacks. In 1994-95, profits plunged to Rs 408 million. And then in 1995-96 the company entered the red when it posted a loss of Rs 2718.4 million. The situation became worse in 1996-97 with a loss of Rs 2,970 million which has been cut back to an estimated Rs 1,750 million in 1997-98.

So the management has come up with two schemes to trim the fat. Employees can take two years' leave without pay and rejoin in the same position thereafter or they can opt for a three-day workweek for 60 per cent of their existing salary.

The management believes the three-day workweek will attract working mothers while male employees will be tempted to opt for the two-year leave without pay to try their luck in other areas. If they succeed, they can quit Air-India. If not, they can always come back.

"Many of my colleagues who have children feel they are being neglected since their residences are far from their place of work and they have to commute nearly three hours daily. So they are accepting this offer. Now they can save time and concentrate on their child's future without losing their job," explains Malathi.

Although Malathi's husband is a chartered accountant and she does not need a job, she feels that any extra income is welcome. "In today's age of uncertainty, nobody wants to lose his or her job. And if the company is not doing well, I think three days a week is a good concept as people will have the option of trying out their luck in other areas."

Says Jitender Bhargava, AI's director, public relations and national marketing division, "All over the world the general standard is that there are only 250 employees per plane. But in our airline we have nearly 700 people each for 26 aircraft. So we had to find some way to revive the airline."

Of course, overemployment is not the only malaise in Air-India. The airline, which was doing well till 1994-95, was asked by the Government of India to stop operating on some profitable routes which were handed over to the loss-making Indian Airlines.

Thus, Air-India has had to discontinue its services to the Gulf states and some southeast Asian countries. Today Indian Airlines has become profitable while Air-India is making losses. "The government has robbed Peter to pay Paul," an agitated senior official says.

To add to the problems, competitors like British Airways have slashed fares by up to 45 per cent to counter the slump in the industry. This has forced Air-India to follow suit in a bid to prevent passengers flying off with other airlines.

George Abraham, general secretary, Air-India Employees Union Guild, says, "The government must have some policy on the operations of foreign airlines in India. These airlines have deep pockets and can survive even after cutting prices. We can't."

He also regrets there is no international body to keep a check on the price wars routinely launched by big airlines. According to Abraham, the bigger airlines are putting the smaller ones out of business by keeping costs low.

Interestingly, Abraham agrees there is no point in going for a confrontation with the management since it will lead nowhere. But he disagrees that excess staff is a real problem for Air-India. "The total revenue spent on salaries is much less in Air-India than in other foreign airlines. Air-India's wage bill is only 18 per cent of the turnover whereas the average wage bill of other foreign airlines is 30 per cent," he argues.

But, he says, the union signed the three-day workweek and two-year sabbatical agreement only because these are voluntary schemes.

Both Bhargava and Abraham agree the airline industry as a whole is not doing well. The profitability of many airlines has slipped, especially after the South-East Asian tigers went bust.

But Abraham also blames the management for a lot of wasteful expenditure. According to him, a former managing director of Air-India stayed at the Taj Mahal hotel in Bombay for a year and sent a bill for nearly Rs 500 million to the company, but nobody objected.

The management argues that the Supreme Court last year added to its woes by ordering it to confirm nearly 800 employees, most of whom are in the lower categories that are not very productive. "No company gives housing, transport, and salaries nearing five figures to its sweepers. We do. Not only that, we give productivity incentives," says Bhargava.

But such quibbles apart, both the union and the management believe the once-prosperous airline can again become profitable after restructuring.

"The industry is in the red and even big airlines are facing a bad time. But last year we suffered a loss of Rs 1.75 billion which is considerably less than the previous year's. So we are confident this scheme will revive Air-India," says Bhargava.