Airline losses

What will you do, if your company is heading for a huge loss and each and every one in the company is aware of it. Will you go on with your Performance based Incentive (what does your performance stand for, if your company isnt doing good), salaries, perks, etc. etc.

Everybody is talking about the Air India's mounting losses of 4000 Crores and when strong measures are being talked about - the employees are talking about an indefinite strike. does it really make any sense at all. I dont understand why is this kind of behaviour exhibited by their employees.

Of course, I agree that it is not just Air India that is into this unique situation, but the whole aviation industry is facing the same tough situation only as the following write up int eh newspapers demonstrate:

According to the International Air Transport Association (IATA), the global aviation industry is expected to lose about $9 billion this year. The Centre for Asia Pacific Aviation (CAPA) says the Indian aviation industry is likely to incur around $2-billion losses this year. Two major domestic air-carriers, Kingfisher Airlines and Jet Airwarys have reduced jobs, slashed salaries, besides Global airlines such as Singapore Airlines, British Airways, Cathay Pacific, Japan Airlines, American Airlines, Delta, Air France-KLM and Qantas have taken similar measures to lessen the impact of current crisis.

1. Pilots of the Singapore Airlines have agreed to one-day compulsory leave every month. Managers and administrative officers are taking one day a month either as unpaid leave or from their annual leave.
2. British Airways has frozen pay and cut around 2,500 jobs since last year. It has also sought 4,000 voluntary redundancies.
3. American Airlines has announced plans would cut up to 1,600 positions by August this year.
4. Japan Airlines wants to cut 1,200 jobs by March 2010.

The high official are talking about " Moment of Truth for their employees" - But have they ever talked about the Moment of truth or the "flying Experience of their customers. Compared to all other airlines, which travels extra mile to get customers and also retain them, what has this airlines done. Even to get their loyalty card, you have to pay and get it. there is no sense of a profitbale enterprise from their employees. How many of them think of giving such a service that people would prefer to come back to them for their next flight. they only do a routine that too a boring job, from the expression that they have when they meet up with the customers. Of course, there are exceptions, but these kind of people are too low to be of significance. There should be a wake up call for providing good customer service for this airline to turn around. Ask any person, if there is Air India and any other airlines flying to the same destination - which one will be prefered - the answer will be the other airline only. When I see smaller and newer airlines eating into the market share of Air India, I am pained. When will these people realize the true meaning of what Gandhiji said" A customer is not an intrusion into our business, but is the reason for our existense". If only every employee - whether it is the ground staff or airhostess or the ticketing agent follow this, then Air India will get there. otherwise, it will be only a black hole where our Indian government is going to sink in more money.

Helping out - is only a circle that comes back

So after a long long time, I am back. My daughter was saying that I was suffering writers inertia problem - whatever it means. Everyday, I used to think that I should write about this topic or that topic, and would even compose mentally what to write, but to actually type out became a effort and so nothing came up.

In these few months, there were a lot of things I touched my heart, one such recent thing was the address by Rotarian Dr.C.S.Ramachandran. I have joined the Rotary club - the new kid on the block - our club is 106th club of the district 3230 of Rotary International. The club promotes 2 things - fellowship and service to Humanity. Dr Ramachandran was sharing with us about his experiences and what touched me was the way he was telling the story of Paul Harris, the founder of Rotary club, as a 6 year old boy being orphaned and how he had to travel to meet his grandfather (whom he was'st aware was there),etc, etc. More than this story, the difference the Rotary club creates in unknown people's life through its Service Projects. he was narrating how in the town of vellore Rotary club provided few school dropouts with vocational help about 5 years back. Recently when he reached vellore, it was pouring cats and dogs and he didnt have an umbrella to get down and go into the place where he was visiting. Suddenly a young person came running and held an umbrella for him to go in shelter to the building. Once he was inside, he thanked the young person. That young person asked, Sir do you remember me, I was helped by your club and I am today having a mechanic shop with 3 of my friends and all of us are doing well. While earlier my whole family used to curse me as a wasteful person, how the whole family waits for me to come home to have dinner. You really transformed my life. This story really touched all of us in the hall. To end it all, the 4 youngsters once again approached the Dr and gave him a cover which contained money, saying that they had saved some money out of their business and are now wanting to donate to Rotary to help it to help some more people like them. See how a help you do in turn helps another person. so ultimately, it is only a circle, what you give comes back to you in a different form.

May those with Service in their hearts grow in large numbers

A dream come true for a Great Person

28th of April 2009 was a very momentous day indeed for many of us - but for one person, it was a dream which had turned out to be a reality due to sheer his hard wok and dedication and having contributed to the society till date with not expecting anything in return, despite the physical age and health condition. I am talking about the Dream of Dr Bala Balachandran to have a world class facility for his child - The Great Lakes Institute of Management in Chennai. it is OK for a man to show his emotions was what we all felt when he became emotional when he started talking about his inspiration coming from his mother and her love for him and how though she is just 4th grade, has enabled and instilled him a great value and thirst for great things.

I am really proud to be part of Uncle Bala, our affectionate, energetic, young old man's great vision.

Just to quote from some of the Newspapers -

Chennai’s five year old leading business school, Great Lakes institute of management (Glim) has established a new campus at Manamai village near Mamallapuram. Adi Godrej, CMD, Godrej Consumer Products remotely inaugurated the green campus from the Chennai trade centre on Tuesday in the presence of industry leaders and officials. It has come up on 18 acres with a built up area of 1.65 lakh sq ft in the first phase. Great Lakes founder Prof Bala V Balachandran said that the total investment in the campus would be between Rs 85-100 crore. The environment friendly green building has been designed to be Leed platinum rated green campus and would be one of the first in India and among very few in the world. There are different blocks dedicated to research, faculty offices and housing, administration, student residences and recreation centres. Stating that his dream has come true, Prof Bala recalled the support he got from leading industrial groups in the country for promoting the B school in his home State. So far, five batches of students have passed out from the campus in the city and the next batch will pursue their MBA programme from the new campus. Inaugurating the green campus, Adi Godrej said lot of people in the country feel it is the infrastructure bottleneck that stood in the way of India becoming a strong nation in the world. While this should be overcome, he is of the firm view the biggest hurdle to be overcome is in the field of education.

The residential campus has been designed with eco-friendly principles in mind and is among the first in India to receive a Platinum LEED (Leadership in Energy and Environmental Design) rating, a global standard for green buildings. The campus is 100 per cent day-lit and will recycle all its waste and water. “It is a dream fulfilled,” said GLIM founder Bala V. Balachandran. “We wanted to give our students not only the greatest of faculties but also the right environment to help them realise their potential.”

CHENNAI: Building a world-class education system and optimising the country’s human resources are key to India achieving its potential on the global stage, according to business leaders present at the inauguration of the Great Lakes Institute of Management’s new campus here on Tuesday.
“A lot of people feel that the big bottleneck is [lack of] infrastructure… To my mind, the real bottleneck, the real hurdle that we have to overcome is [lack of] education,” said Adi Godrej, chairman and managing director of Godrej Consumer Products.
“A lack of leadership across the board is the bane keeping India from reaching the heights,” said Madhur Bajaj, vice-chairman of Bajaj Auto.
“Our country has genuine problems with both the hardware and software of development,” said Shashi Tharoor, former under-secretary general of the United Nations, who delivered the GLIM convocation address earlier in the day. He defined the ‘hardware’ as the roads, ports, airports and sanitation systems that “need colossal amounts of work.” However, he felt that the ‘software’ or human capital needed even more work. It was not just a matter of education, he said. If the country could not ensure food, shelter and basic healthcare for all, there was no point in just filling people’s brains, he pointed out.
He encouraged GLIM graduates to stay in India to provide much-needed vision and leadership. “Twenty years ago, I said that the only place in the world where Indians haven’t succeeded is India,” he said. “I think the time has come for Indians to succeed in India.” Chief secretary K.S. Sripathi went a step further and urged graduates to stay on in Tamil Nadu, saying that the State would see a higher growth rate in 2009-10.

Sir, we are all with you in achieving what every you are dreaming about still further.

Sarada

Arrest of Indian bank ex Chairman

Yesterday evening I saw the news item of the ex chairman Mr Gopalakrishnan of Indian bank being awarded a sentence of 14 years for his misuse of official position to sanction a loan to a party and causing a loss of 8.41 crores losses to the bank. At one hand I was pained to see this as I have seen him in a personal capacity as a simple person -who has been forced to sell his ancestral property and go to live in a small rented house after all the hell broke loose for him - it was a riches to rags kind of story. while on the other hand, here is a instance of the justice system (I dont know the case details and I am not commenting on the right or wrong of it please) where somebody has been punished for causing loss to his employer.

My question is - the accountability on the part of a employee is really great - but what about the politicians - how many crores of the Indian rupees is lost everyday by these peoples' mismanagement. When will these people be made accountable for it. will we see something like this happening in our life time?

With this question, I am signing off this brief writeup.

Thanks to Uma to make me come out of my slumber and hibernation.

Sarada

governement taxes

Mr Chidambaram as a finance Minister always finds ways and means of filling up the coffer of the government with new and innovative methods for the tax collections. some of these I am totally in agreement with as Government needs to collect money only from its people as its revenue earners. These are the following that I strongly feel about

• The taxes are skewed towards only monthly wage earners. In this case the amount earned is totally transparent and hence visible to all




• What about those who earn in cash and which will be more than the monthly earnings of these salaried people




• Also for those with a seasonal income, there is no relief at all. Take for example Actor/small time builders etc. In one year they may earn huge amounts, but next year it may be nil. so having paid 30% of their income as taxes in a year, what will they do in the next year.




• This same kind of situation is now applicable for those who have been laid off. This financial year, their income is very substantial - what about the next year ?




• In western countries there is a unemployment payout which will make those people who have lost their jobs to fall back on. But in our country there is no support system. I pity those youngsters who work in IT industry and who have splurged their money left, right and center and now have high EMI for their cars and houses and credit card payments looming large in front of their face. What will these people do. I am really worried. For this point public will say that ' these people enjoyed and are now paying for their mistakes'. but the entire society who profited by this excess spend also in terms of money circulation.
• Take the case of Service tax which goes up to 12.36 (including the educational cess of 3%) makes the services that much costlier. while the income tax is only the profits, these indirect taxes likes service tax, cst, st, etc are on the cost of the product or services. Also all the consumers are made to pay this irrespective of their income, geography, etc.
• Take the case of education cess which is applied in all the taxes that are collected. The amount collected under the education cess is enormous. Does the Government really spends that much money on the Education. Do we know the amount collected and the amount spend under this head. I am yet to research into it.
• Another factor that has always concerned me is the upper limit for the savings that are given a relief which is 100,000 wherein you deposit in bank deposit or post office or PF, etc which are all deposit which are very secure. But only this much amount can be invested - of course this amount also includes the insurance you pay towards your self and family, the children education needs, etc. Here the interest so received are taxable too. But take the case of investment in stock market or mutual funds - the dividends so received are non taxable. so many have invested in these speculative instruments. Why doesnt the government examine the interest received from term deposits to be non taxable - let there be a cap for this. This way there will be solid investment available for the people as a fall back instead of putting everything in speculative market. there are these small investors who are seeing their hard earned savings invested in stock market and whose value has been eroded by close to 40%.
• While earlier the post office savings were attractive (this also provided funds for the state governments), this ministry has made is so unattractive which also saw a flight of people going in for investment in mutual funds and stock markets - and who at this juncture are torn to pieces. My question is why should the government make things more attractive for these speculative investments.
• However I have to say that we definitely have a low tax structure in our country as only when you cross 600,000 (after deducting the above 100,000 savings window available) you tend to pay 30%, which I say is really good.
• My only request is that depending on the income slab give the savings window a higher limit so for a 500,000 bracket person, make that 200,000 is available for deduct able limit. this way you will make sure that there is a solid savings available for the people which will help them in terms of hard times. do you think a person who is now jobless can get a good value if he attempts to sell the shares he has purchased one year before. So who will make good his loss of in investment and his salary loss.
• The FBT is a good initiative - but once again aimed only at salaried class. of course, this makes that whatever is paid to the employee is totally accounted under the payable to the employee as most times those in kind are not looked as salary. so bringing the perquisites under the tax scanner is good. But taxing the hotel stays and travel - can somebody explain the logic of how this is a fringe benefit that is enjoyed by an employee. So when the nature of your job makes you travel where will you stay - why should the corporates pay a tax for doing their business across geographies. How will the corporates do the marketing expenditure.. But the funny thing is that in our country the biggest employer is the Government and it is exempt from the FBT. Earlier the salaries in private sector or even now in some sectors are more than the government. So these perquisites like government accommodation are the extra attractions that was more than making up the low salary for the government to attract people. Now the pay commission revisions are all making up the salaries of the government employees to be good. The amount of leave these people enjoy is phenomenal and there is no incentive for productivity nor is there is a penalty for non productivity. In a private sector if your don't perform you get stagnated and sometimes you also loose your job.

Like this there are a lot of things that I think and strongly feel about, but I know that there are very good analytical people at the helm of affairs who think through and then implement various things in the government level. With this I conclude this posting and look forward to your views.

Corporate Governance /Satyam fiasco

Everyday the papers carry at least 2-3 items about the Satyam episode and a lot has been discussed about the corporate governance, the role of independent directors and the accountability. No, I am not going to talk about all these things - But I am going to talk about something else which also revolves around these same core issues -

So when will the nation be talking of the accountability of the government, government offices, etc. Like the corporate sector,where we hold the CEO responsible for the acts of commission, omission, etc, why aren't we holding the Heads of the States and Country accountable. Let these people run their departments like a corporate entity - let there be a quarterly results published for each state like what the public limited companies do. The public limited company have the obligation to the general public to publish their accounts because the general public has invested money in their company. Aren't we all investing our money in terms of income tax, service tax, sales tax, etc and so aren't we entitled to these being done on a quarter on quarter. Let there be SLA and let their performance appraisal be made public.

Today I read a news item in the paper about red sand getting into the environment in one of the suburb of Madras because the corporation started the road work and later stopped it midway for want of funds. At the same time, in Marina Beach, for the past few months we are witnessing beautification work being carried out - The most funniest thing about this work is that they are relaying the paver stones on the footpaths which were good (no damage) and redoing with marble stones. if it is our house, whether we will spend money on replacing a good area just for the heck of it is the question. What I like about the US county system is the say the common man has on what the county can spend money on - here in India - do we have that freedom.

As a nation lets make ourselves accountable to our actions everywhere - whether it is house, office or government. If this becomes our way of life, that will be the Golden period of modern India. I pray for this to happen soon.

Padma Awards

The Padma awards are instituted by Government of India and I am reproducing below the recitation of these awards as found in the government website

Padma Awards, namely, Padma Vibhushan, Padma Bhushan and Padma Shri are
given for exceptional and distinguished service in any field including service
rendered by Government servants. The recommendations for Padma Awards are
received from the State Governments/Union Territory Administrations, Central
Ministries/Departments, Institutions of Excellence, etc. which are considered by
an Awards Committee. On the basis of the recommendations of the Awards
Committee, and after approval of the Home Minister, Prime Minister and
President, the Padma Awards are announced on the eve of the Republic
Day.

When I went through the list released yesterday I became curious to know about the nature of these awards as I found that all the awardees were more from Arts, Literature & science & Medicine.

What I found was very interesting. There are a total of 3381 awardees so far and the categories

1. Literature & Education (673) and Arts (676) had each 20% each,
2. Medicine (401), Science & Engg (394), Civil Service (393), Social Service (344) have 11% & above each
3. Public Affairs (188), Sports (157), Trade & Industry (123) range from 5.6 - 3.6%
4. The rest - defence services 1, Wildlife conservation - 2, Journalism -5, others 23 all form a minuscule less than 0.1%

So why is our country concentrating on Arts & literature more than others. The worst thing is there is no mention of " Agriculture" which is what is what our nation is supposed to be. I don't say we should not patronise arts & literature - but why give a prime importance to it. Why isn't Trade & Industry not getting a proper recognition while Agriculture is given a go by. Don't these are the main things on which all other things grow upon.

Coming to my home state Tamil nadu, the situation is no different, of the total 320 awards, the bulk of it goes to Arts 113 at 35%, followed by Literature & Education at 11% with 35 awardees. For industry it is just pathetic 4% with 13 awardees, while for wildlife conservation, journalism, defence services, & others category it is a 0 tally. However, in Medicine & Public Affairs, we seem to fair better than the National average clocking 15% (48), 8.75% (28) against national level at 11.9 (401) & 5.6% (188)

In Trade & Industry sector I did a further study and the topper are the following states

1. Maharashtra - 44
2. Delhi 16
3. Tamil Nadu 13
4. West Bengal 9
5. UP 8
6. Andra Pradesh 6
7. Karnataka 5
8. Gujarat 5
9. Rajasthan 3
10. Punjab 2
11. Bihar, Goal, Haryana, J&K, Jharkand, MP, Orissa, - 1 each

I feel the above number are not truly reflecting the spirit of the different states at all.

So what is that I would like to request to the Government to consider

1. institute a new category " Agriculture" and start recognizing
2. Also include Infrastructure as one of the categories and recognize players in that field
3. Trade & Industry to be given a better prominence
4. Give more prominence to nature conservation rather than just wildlife conservation
5. While recognizing NRI contributions to India, recognize the support of other Nationals for the Indian cause - This will include those that support India
6. Same way recognize the contribution of PIOs contributions to those countries where they have migrated as they have made the " Brand India" famous for all of us
7. Make guidelines in such a way that all states are sending recommendations for all categories ( I think this will be the practice)
8. Have a maximum cap for each of the category, unless there is a exceptional performance

Let there be an inclusivity of all sector, this is my humble request. I dont know whether I have covered all those sectors that are required for the overall growth and well being, if not, please write about those that I have missed.

Jai Hind