Edits, Columns & Analysis - October 2008

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Naresh Goyal is his own worst enemy
Anjuli Bhargava
Business Standard
October 24, 2008
New Delhi: While the mishandling of the Jet Airways sacking and reinstatement of 1,900 employees was an HR and PR disaster, the larger implications of what happened are also worth considering. It is not just that the chairman of India’s most successful airline became the butt of jokes (television channels played and replayed Naresh Goyal’s melodramatic interview), it is also a question of what he knew, when he knew it and who did the bungling.
If Goyal did not know of the sacking, as he claimed on TV, it makes one wonder how he functions as the admittedly hands-on chairman of a publicly listed company. I for one refuse to believe that “his management” would take such a grave step without consulting him or taking his approval. If, on the other hand, he did know about it (which, by all indications and according to sources within the company, he did), then what does the hypocritical act that he performed on television say about this aviation pioneer?
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Flying Low
Times of India
24 Oct 2008
After the drama of the Jet Airways retrenchment and employee reinstatement, serious measures to bring relief to the Indian aviation industry are finally underway. The meeting among oil minister Murli Deora, aviation minister Praful Patel, airline representatives and oil company executives has resulted in some crucial proposals. Important in the short-term is an extension of oil company credit to the airlines from a two-month period to three months. However, this is an ad hoc measure, if a necessary one. Deficit is simply being transferred from the airlines to the oil companies that are expecting Rs 1,40,000 crore losses this fiscal year. More long-term regulatory changes are needed.
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The grounding of dreams
Arvind Singhal
MARKETMIND
Business Standard
Oct 23, 2008
New Delhi: In the midst of growing bad news on just about every front, one that is amongst the most frustrating is the turbulence affecting the Indian aviation sector. While the drama that was played out by Jet Airways — till now one of the most respected players in this rapidly growing industry — was totally inexplicable, it must force all those who have anything to do with civil aviation — those who could dream and fly for the first time in their lives, the frequent business and leisure travelers, the hundreds of thousands who have found direct and indirect employment thanks to the many new-generation airlines and the support-services businesses that have sprung up because of these start-ups, and the visionless self-serving politicians and bureaucrats who have stifled the growth of the entire civil aviation sector for most of the period since India’s independence — sit up and take notice.
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‘Taxes, not over-capacity, killing aviation sector’
Ashwini Phadnis
Business Line
Oct 22, 2008
New Delhi: For the Chairman of Kingfisher Airlines, Mr Vijay Mallya, it is not over-capacity in the domestic market place, but the high taxation levels in the country that is killing the domestic aviation.
At a meeting with Business Line at the Business Centre of Taj Palace hotel as he rushed for four back-to-back board meetings, Mr Mallya outlined what he felt were the problems facing the industry.
Excerpts:
There is a rumour that you have asked Accenture to look at downsizing staff in your airlines.
We do not have surplus staff. Accenture was specifically hired to do merger strategy and merger synergy identification with Air Deccan. All this has been completed and we have actually realised Rs 300 crore out of the Rs 375 crore spent on synergies.
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A rotten joint venture
Gautam Chikermane,
Hindustan Times
October 21, 2008
The late night air around the three-storeyed Kingfisher Airlines’ Vile Parle office in Mumbai on October 13 was thick with expectation. Reporters stood outside waiting. Five hours later, when the chairmen of Kingfisher Airlines and Jet Airways emerged, armed with their wide smiles, the “alliance” they announced — which experts termed ‘cartelisation’ — only served to cover their next day’s intent.
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‘Dropping load factors, a big concern’
Ashwini Phadnis
Oct 13, 2008
Business Line
During his recent visit to India, the Chief Executive Officer and Director-General of the Geneva-based International Air Transport Association (IATA), Mr Giovanni Bisignani, met with mediapersons from a select group of publications, including Business Line. At the meeting, the head of IATA, which represents, leads and serves the global aviation industry, outlined steps that need to be taken to revitalise the domestic industry.
Excerpts from the interaction:
You talk about a loss of $ 1.5 billion for the domestic aviation industry. What can be expected in the coming months?
Losing $1.5 billion is a massive number for a country like India. The domestic industry is at a fragile and delicate moment. That is why the situation has to be handled more carefully because a great start-up could go out of control. We have all seen the recent mergers between Jet Airways and Air Sahara and between Kingfisher and Air Deccan.
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