Rediff.com  » Business » A professional firm cannot function on crutches: Ashwani Lohani

A professional firm cannot function on crutches: Ashwani Lohani

By Arindam Majumder
March 17, 2016 10:48 IST
Get Rediff News in your Inbox:

'For an airline, the most important asset are the pilots. They are a mature lot who understand that strikes will not help anyone, that planes have to fly; only then will the money come.'

It has been seven months since Ashwani Lohani, bottom, left, took charge as Air India’s chairman & managing director. Lohani took charge at a time when Indian airlines were having it easy, thanks to low oil prices. Air India’s fortunes have also brightened, but clamour for privatisation remains. Lohani tells Arindam Majumder that Air India will eventually turn profitable. Excerpts:

After eight years, there are talks of the airline clocking operating profit. Is the miracle only due to oil price?

Fall in oil prices have helped. But, the recovery is much higher than what has been the gains from oil prices. We are looking at consolidation and growth. And, we are talking about more flights and aggressive revenue management. To put it simply, there is an attempt to run Air India like a commercial organisation. Ultimately, the operating ratio of an organisation tells you everything about it.

What kind of operating ratio are you targeting in the near term?

One has to understand the organisation was making losses for a long time. We are targeting to bring it below 100 by the next financial year. There are huge backlogs of past loans for which we are doing debt servicing. Even with all these, we are targeting a positive net profit by FY18.

According to details provided to Parliament, half of the routes were loss-making. How far have you been able to rationalise these routes?

Thanks to oil prices, most of the loss-making routes have turned profitable. If you look at the April-January period, 75 per cent of the routes are now making operating profits. We are hopeful of making it 100 per cent.

After the merger of Indian Airlines and Air India, there have been issues regarding parity of the airlines that led to a human resources crisis. Have you been able to tackle it?

Some issues have been sorted out, but a few still remain. Harmonising the wage issue is the biggest challenge. But, I am looking at Team Air India. That is the message we are trying to give everyone. For an airline, the most important asset are the pilots. They are a mature lot who understand that strikes will not help anyone, that planes have to fly; only then will the money come.

Are you confident that Air India won’t need any more crutches from the government after the bailout package of Rs 30,000 crore?

Air India will not need any more financial assistance. A professional company cannot function on crutches. It has to make money of its own for survival.

But there is so much clamour for privatising Air India...

I believe in the inherent strength of the private sector. Having said that, I think Air India can match the private airlines.

Get Rediff News in your Inbox:
Arindam Majumder
Source: source
 

Moneywiz Live!