Saving the Maharaja: Arvind Jadhav's plan for Air India

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It is difficult not to feel philosophical when you sit across the table with Arvind Jadhav at his office in New Delhi. What, you wonder, goes through a man's head when he is hated by the rank and file in the organisation he heads? What, you wonder, does a man feel like to be the lone wolf with no pack to call his own? Before the questions coalesce, the answers shake you out of your reverie. Arvind Jadhav, Chairman and Managing Director at Air India, doesn't give a rat's backside. Really!

"The first day I came into work, I looked at the airline's books and told myself we're in for a strike," he says. Calmly. Without any trace of emotion. And damn right he was. There was just about enough cash to run the airline for four months. At Rs 5,000 crore, the losses were unacceptable. And each month, it was burning up about Rs 400 crore. Because desperate times call for desperate measures, four months into the job, he asked the pilots and senior managers to take a 50% cut in their allowances and incentive pay. A few days later on September 25, the 300-odd executive pilots on the airlines roster started reporting sick and rapidly brought the airline to its knees.

For four days, at the airline's headquarters in the capital city, the war of words between the management led by Jadhav and the pilots unions escalated. Apparently, they came close to blows and when all dialogue broke down, at 10 pm on September 29, the no-nonsense, no bull-shit chairman was set to sign an order to shut the airline down; that would have been the second lock out in Air India's 77-year-long history.

Later that night, Jadhav took a call from the Prime Minister's office (PMO). The caller asked Jadhav to back down. It left him with no choice but to rescind the notice. The agitation was called off and yet another nail was struck into Air India's proverbial coffin. "It's a bit like shadow boxing," he says. "There are many connections between the government and the employees. So at times, you don't know who's standing behind whom."

Almost 1,000 miles away in Pune, Shashi Ramdas winced. A few weeks ago, he had written a note to Jadhav. Eighteen years ago, he used to work out of the same second floor wood panelled office at Airline House. A former Indian Air Force hand who had seen action in two wars, Ramdas was drafted by the government to bring order into what was then Indian Airlines. He was fighting an identical battle with the pilots then. The airline needed a team stationed in Kolkata. But the pilots insisted on staying in Delhi. It left the airline with a ridiculously expensive option. Fly them down from Delhi to Kolkata to operate flights in the east.

Before then, Ramdas had been asked twice to take it easy in his skirmishes with the union. The third time around, he ensured he had Madhavrao Scindia, then the minister of civil aviation, to back him. 'Take them on and sort them out once and for all,' Scindia had told Ramdas.

But as the agitation continued and pilots started to report sick, pressure mounted on the minister. He finally announced the setting up of a committee to look into their grievances. Ramdas heard about the move in the newspapers the next morning. He resigned the same day. "I was simply not allowed to run the company as a chairman and managing director should," he says.

But Jadhav, Ramdas figured, is made of sterner stuff. A few days after taking over at the airline, he gave an unusually candid interview to Businessworld. "The debt of the company is 100 times the equity. This is unsustainable," Jadhav told the magazine. His candour disarmed Ramdas. He wanted the incumbent to hang on in there. Which is why, he wrote the note.

A Troubled Legacy

Jadhav is no dyed-in-the-wool aviation wonk. He's a career bureaucrat. His last assignment was as principal secretary at the department of infrastructure development in Karnataka. In the job, he had had his fair share of public skirmishes on the controversial Bangalore International Airport. While on that assignment, he caught the PMOs attention, which sounded him off as a potential candidate to take over the troubled Air India. Finally, in March, the committee of secretaries asked him to make a presentation on how he intended to turn the airline around if he was given the job. Sources say it was clear and lucid enough to convince everybody that Jadhav was indeed the best man for the job.

Once inside Air India, he quickly figured out the operational, financial and strategic issues at stake. For instance, 98% of the routes Air India operates on lose money. Then there is this little matter about Air India having 32,000 people on its rolls and much of its functions outsourced. Similar international airlines though operate with half the number of people. And if that isn't enough, the much written and spoken about merger between Air India and Indian Airlines was in tatters. Except a common board, the two airlines continued to operate like separate companies on the ground. There were huge differences in pay scales across functions and levels.

The biggest issue on hand was that being a government-owned enterprise, nobody at the airline believed their jobs could come under threat. History was with them. Air India, everybody was convinced, would never be allowed to go down.

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