Monday, May 31, 2010

Air India, politicians and corruption.

This letter reveals the inside story
By Capt. RL Mathur

 Why Air India is going into heavy losses and how corrupt politicians are looting public money.
 Read the inside story told By Capt. Mathur.

There has been a lot of discussion in the media regarding foreign pilots (also known as “expat pilots”) in the aftermath of the tragic air accident at Mangalore.

The Minister of Civil aviation, many bureaucrats, airline officials and even a few journalists have gone to great lengths to explain how experienced foreign pilots hired by Air India and private airlines are essential to the Indian aviation industry.

 A retired spokesperson of Air India, who has no business to speak on behalf of Air India anymore, has been repeatedly appearing on television to painstakingly explain how important foreign pilots are to the company.

Clearly the air disaster at Mangalore with a foreign pilot at the controls has made a lot of powerful people worried .Very worried.

The point however is not whether foreigners should be allowed in Indian carriers or not. Some of them are highly experienced and respected professionals who have undoubtedly made a huge contribution to the Indian airline industry. This article is not about them.
It is about a shady scheme on gargantuan proportions, backed by government policy and a well oiled system that feeds on unimaginable corruption, on a scale that would astonish every innocent fare paying air passenger.
Air India is a government run Public Sector Undertaking and thus, it is assumed that rules applicable to other government institutions meant to keep corruption under check would apply to it too. The Ministry of Defense, for example has strict rules debarring the involvement of private middlemen or brokers in facilitating defense contracts.
Other ministries have strict guidelines on the recruitment of qualified personnel or consultants where a transparent tendering process has to be adhered to.

In the case of Air India and its subsidiary Air India Express, such rules do not seem to apply at all.
Some years ago, the ministry of civil aviation that ran erstwhile Air India and Indian Airlines, cooked up unrealistic passenger growth projections and placed massive aircraft orders for Air India and Indian Airlines. Private airlines only too eager to float shares to rake in public money and capitalize on the hype jumped in the bandwagon. Overnight, hundreds of vacancies for pilots were created.
Air India began hiring foreign pilots in 2003.Other reputed companies like Singapore Airlines and various Gulf Airlines such as Emirates, recruit foreign nationals too but with great transparency. Foreign pilots hired by them are a part of the regular workforce and are directly hired, without involving middlemen, on local terms. European airlines do not hire non EU nationals.
In Air India’s case, no global tenders were floated for foreign recruitment firms and no advertisements in newspapers announcing vacancies for foreign nationals appeared. Bureaucrats and officials in Air India, hand in glove with their counterparts and politicians in the Ministry of Civil Aviation, Ministry of Labor, Home Ministry, Ministry of External Affairs and other agencies hastily cleared the proposal to hire foreign nationals and the policy of recruiting foreign pilots was established. Politicians of opposition parties were roped in and a cozy arrangement was made.
To bypass opposition from its own employees and to circumvent elaborate transparent recruitment procedures and various laws, a defunct subsidiary, Air India Charters Ltd was revived and used as the vehicle to issue foreigners contracts. Hence the hundreds of foreign pilots in Air India and Air Express are routed through Air India Charters Ltd through recruitment firms and then using a legal loophole, deputed to Air India and Air India Express.
Private firms comprising middlemen and brokers, with the respectable title of “Aviation Consultants” were approached and many of these, such as Rishworth Aviation, Parc Aviation and scores of others appeared out of the wood work. Overnight, new consulting agencies sprang up, some in murky tax havens like the Isle of Man and Channel Islands. All suddenly began to offer “experienced” pilots from all parts of the world. Many of these foreign pilots had and continue to have no clear track record. Some claim to have thousands of hours of flying experience in countries as diverse as Russia and Rwanda. Some of the airlines and countries (such as Yugoslavia and Czechoslovakia) that these pilots flew in do not even exist anymore. No background checks are carried out by either Air India or the Indian Government. Strangely the agency of middlemen, or “consultant” supplying the pilots, is entrusted with this task.

Lucrative contracts were tailor-made to lure foreign pilots in droves. 
Decades of rules meant to harass Indian pilots such as stringent medical standards were waived off by the government for foreign pilots. Air India’s pilots who are Indian nationals, have to undergo a DGCA medical test known as a Class I medical examination and then are again subjected to an elaborate company medical test known as a Pre Employment Medical Examination (PEME).None of these apply to foreign nationals in India.
For example, an Indian pilot may not be allowed fly an Indian passenger aircraft wearing a pacemaker but a foreigner most probably would because the medical standards in his country allow it. There have been cases where Indian pilots who are permanently medically grounded by Indian authorities get foreign citizenship and foreign licenses and return to India to fly planes on “expat” terms. At least two such “foreign” pilots have served Air India on such a contract.
In fact foreign pilots flying Indian registered aircraft are not even required to have Indian flying licenses! All they had to do is produce “proof “of experience and a foreign license and the DGCA issues a “temporary authorization”. Such “proof” of experience could be a fake certificate or a fake rubber stamp but nobody carries out a background check.
A foreign pilot is not legally answerable to the Indian DGCA since he does not have an Indian License. The DGCA can neither revoke nor suspend his flying license. Technically, an Indian Co Pilot involved in a serious air accident may lose his flying license and his job; whereas the pilot, if he is a foreigner can take the next flight home and start life on a clean slate!
To prevent the foreign pilots from coming under the ambit of direct taxes in India, the pilots are “officially” based in foreign countries such as Dubai and not given “local” terms of employment. Every month Air India pays the foreign recruitment agencies the salaries of these pilots along with a commission or “consultancy fees” to foreign bank accounts. This is turn trickles back to the various politicians and officials who patronize the system.
Not surprisingly, a foreign pilot who recently approached Air India for a job recently was asked to route his application through a recruitment agency!
As a result ,hundreds of crores of income tax that would have normally gone to
the Indian Income Tax Department through TDS had these pilots been based in India, is diverted to foreign bank accounts in foreign countries
“Liaison officers” and “advisors”, meant to “facilitate” business interests, are regularly appointed by these foreign recruitment agencies to “liaise” with the various ministries and departments. Two of Air India’s senior most executives have retired in the past one year and have joined such firms as “liaison” officers. Another, a retired CMD, continues to show great personal interest in negotiating foreign pilots’ contracts on behalf of recruitment agencies.
Foreign pilots are provided more leave, sometimes up to ten days in a month – the justification being that they need to go home to be with their families. Indian pilots flying for Air India Express are made to go on postings for fifteen days at a stretch and given one day off at their home base. Ironically these Indian pilots spend three to four days every month with their families and the foreigners (who could be from neighboring Nepal or Dubai) spend more than a week to ten days every month on holiday.
Foreigners also get paid a higher salary and are entitled to five star hotel accommodations even when not flying. As a result, hundreds of hotel rooms are booked by Air India at exorbitant rates – a percentage of which presumably flows back to some officials.
This murky system in Air India of the past seven years has quietly gone unnoticed. As long as flights took off on time and passengers reached their destinations nobody really cared. Unions cried themselves hoarse- only to be drowned in the din of the money power of powerful lobbies and an ill informed media often hesitant to upset a mega industry that generates lucrative advertisement revenue 
The air crash at Mangalore need not have necessarily been caused by an incompetent foreign pilot. This article is not meant to disrespect the majority of foreign pilots in India. But the larger issue of rampant corruption and greed must be addressed immediately. Little wonder that all the officials in the dishonest food chain are now working overtime to cover up the issue. Sadly the one hundred and fifty eight innocent people that have been killed cannot speak for themselves anymore.

Therefore we, the rest of the nation, must stand up in one voice to demand a CBI enquiry to unravel the mess. We cannot afford to wait for another air disaster to prove the politicians, bureaucrats and officials wrong.
Because the next time a shady foreign pilot from strange country with a dubious qualification or medical history crashes a plane, you and I could actually be on it.
Capt. RL Mathur

Dear Prime Minister,

You will say, these are only allegations. Anyone can make allegations. You need to prove charges.

Would you investigate these serious charges to expose the corruption in your government?

After all, it is a loot of public funds and you and your government is entrusted with the job to safeguard wealth that belongs to people of India. It is not a a Private Limited Company owned by one Proprietor?