On August 2015, the Appointments Committee of the Cabinet approved the appointment of Ashwani Lohani as Chairman and Managing Director (CMD) of the national carrier Air India. Lohani has been appointed as CMD for three years in place of Rohit Nandan, an officer of the 1982 batch of the Indian Administrative Service (IAS). Nandan’s three-year term ended last year; but he was granted extension up to September 21, 2015. Lohani is a mechanical engineer who joined the Indian Railway Service in 1980. Metamorphosed into a bureaucrat, currently, he is holding the post of Managing Director of the Madhya Pradesh Tourism Development Corporation (MPTDC). He is credited with having turned this financially ailing organisation around. Also, earlier on in his career, he turned around India Tourism Development Corporation post-disinvestment in 2001-02. For these achievements, he is generally referred to as ‘Mr Turnaround’. The moot point is whether or not, Lohani can replicate his achievements in the past in his new assignment as the CMD of the national carrier.

While Lohani has an impeccable reputation as “a competent and an honest professional who does not bow to political will” and has an impressive track record, the task before him as the CMD of the ailing national carrier is indeed formidable and unenviable! His appointment comes at a time when the Ministry of Civil Aviation has been trying to extricate the national carrier from the financial quagmire it has been wallowing in for the last several decades. Air India has a humongous debt burden of Rs. 40,000 crore and has consistently been incurring losses, having accumulated an additional financial burden of around Rs. 30,000 crore. The airline is surviving on a lifeline from the government by way of a Rs. 30,000-crore bailout package the infusion of which began in April of 2012. Currently, the management is embarked on a plan to turn the airline around by 2019 through extensive financial restructuring and better management.

Air India has been on a continuous downslide ever since J.R.D. Tata stepped down as the Chairman in 1978. This is attributable primarily to the fact that an airline, which is a challenging commercial venture, was reduced to the status of a department of the Central Government under the control of the bureaucracy. Over the last 37 years, the national carrier has generally been headed by bureaucrats, i.e. of the IAS cadre from the Ministry of Civil Aviation who are obliged to take orders from their superiors in the Ministry. They are also acutely aware of the fact that their tenure with the national carrier is limited and that sooner than later, they will have to return to serve in a different capacity in the Ministry of Civil Aviation or any other Ministry in the Central Government. As the CMD therefore, they have obviously been under compulsion to tread carefully and toe the line quite willingly. As the Government of India is unlikely to transfer the national carrier into private hands at least not in the foreseeable future, the CMD of the airline appointed from amongst the bureaucracy, will continue to be in the grip of the bosses in the civil aviation establishment of the government. In this situation, it is highly unlikely that the CMD will ever have a free hand in taking decisions to be able to really turn the national carrier around. Instead of serving the interests of the airline, the CMD will end up being obliging to the bureaucratic and political leadership in the Ministry of Civil Aviation. As it has happened in the past, the airline management had been compelled to give up routes in the international segment that had high traffic density to benefit some private carriers and ultimately to the detriment of Air India’s financial well-being. Similarly inordinately large orders for aircraft were placed reportedly under instructions from higher echelons in the establishment.

Managing the national carrier and to put it on the track to profitability will require not only superb managerial skills, but other leadership attributes as well. While Ashwini Lohani will not be found wanting in managerial skills as he already has a proven track record, he may encounter difficulties in two areas. A major handicap will be his lack of experience and understanding of the regime of civil aviation as he has had no exposure to this regimen in the past. Besides, he may find himself in a situation where he has no autonomy in decision making in running the national carrier and hence may be compelled to function in a manner that may not be commercially viable or be in the best interests of the airline.

Without a high degree of autonomy in management, the new CMD may not find it easy to turn the national carrier around.