Lohani’s turnaround credentials up for test
Appointment of Ashwani Lohani as Chairman of the Railway Board comes at a time when the Railways is passing through a turbulent period. But Lohani, former Air India Chairman and Managing Director ( CMD), knows turbulence only too well.
When he had taken charge of Air India in August 2015, the airline was in the midst of a pilots’ strike. On top of that, staff morale was low due to unresolved issues linked to Air IndiaIndian Airlines merger. The man, who had previously served as the Divisional Railway Manager in Delhi, believes he’s “a turnaround specialist”.
Did Lohani turn around Air India? Numbers show the stateowned airline has improved efficiency in the past two years. But it failed to meet the target set in the turnaround plan on multiple parameters. According to presentations made by Air India to the Ministry of Civil Aviation, the management said the airline was able to increase core revenue, ancillary income and operating ratio, while trimming losses, in FY17. For the year 2016-17, the airline increased its revenue by almost 10 per cent to ~22,521 crore against ~20,526 crore in the last financial year. It also cut losses by 5.05 per cent to ~ 3,643 crore, compared to ~3,836 crore in the last financial year. “What’s noteworthy is that we have managed to reduce the loss despite increase in fuel charges and landing charges at airports,” a senior Air India official said.
But Lohani could not arrest the steady decline in Air India’s market share. “LCCs started dominating with huge capacity, yields started dropping. We could not match them (private airlines),’’ another official said. He added that unlike a private player, ‘’we have to handle multiple complexities while taking strategic decisions’’.
Despite the hurdles, there’s been some expansion too, especially on international routes, under Lohani. Air India doubled frequency on the DelhiSan Francisco route, launched direct flight to Madrid and Vienna and started a Ahmedabad-London-Newark , DelhiCochin-Dubai services.
Lohani said his biggest achievement was that Air India ran like a business now, without free tickets and upgrades. ‘’You have to be trustworthy to your subordinates,” he said. On August 20, after the derailment of Utkal Express claimed 21 lives, Lohani blamed bureaucratic red tape for the incident in a social media post. “The tragic railway disaster is a glaring symptom of the crying need for structural and process reforms cutting across hierarchies down up to the ground level that this great organisation needs, along with a genuine focus on HR,” he wrote.
Within days of that post, he was appointed chairman of the Railway Board. Lohani’s credentials of a “turnaround specialist” is up for a test now.