When Austrian Gustav Baldauf, a former pilot with 14,000 hours of flying experience, took over as chief operating officer at Air India in the troubled times of 2008, many thought it was the turning point that the beleaguered airline had been waiting for. Its day-to-day operations needed as much fixing as its mounting debt and loss of market share did.  Yet, on February 28, when Baldauf resigned from the company, it looked like the cause had been lost. Operations were as muddled as before: The merger of Air India and Indian Airlines was still on paper with the two wings operating pretty much independently; there was a strike notice from the staff union; debt had mounted to Rs. 15,000 crore; two more senior officials--Pawan Arora, COO of Air India Express and Stephen Sukumar, chief training officer --had also quit.  And, at least to casual observers, it looked like the new civil aviation minister, Vayalar Ravi, had taken things in his own hands, undermining the nascent turnaround strategy that was being put in place. A career trade unionist who had been in the labour movement for nearly 60 years, Ravi sent shivers down the collective spine of pro-reform forces. It was a reasonable question to ask if Air India was slipping out of the control of the business-side guys such as Chairman and Managing Director Arvind Jadhav.  It turns out that reality is quite different. Baldauf may not exactly have been the face of reform that was defeated by status quoists. Instead, he alienated himself from the agenda by missing the cultural nuances of a giant public sector company and the bureaucratic compulsions that come with it.  Perhaps, he handled Air India like a private company, which it isn't. "Captain Baldauf made dozens of presentations on what needed to be done. Unfortunately he was unable to execute any of it," says a senior executive who had worked closely with him. The COO's biggest failure was the inability to realise that even though the merger was complete on paper, employees were still operating under two entirely different conditions. Below the general manager level (98 percent of the workforce), they were actually two different airlines, Nacil A and Nacil I. He came at the problem assuming he was dealing with one. The pitch, roll and yaw--Captain Baldauf lost control of all.  On the contrary, Vayalar Ravi seems to be taking a pragmatic approach. Being the seasoned negotiator that he is, Ravi is working towards a solution that will be binding on all parties--the unions, the management and the government. He is able to appreciate the complexities of integrating two separate staff forces, with different pay scales and service rules. Through his goodwill with the unions, if he is able to push through a wage cut and tougher productivity-linked compensation, he will have achieved where others failed.  On his part, CMD Jadhav has gone on an overdrive to fix the business model. He is making fundamental changes to how the airline is run, boosting its international profile and revving up plans to use the spanking new aircraft fleet better. If Ravi's human touch succeeds, Jadhav's business excellence can put a unified Air India back in the game again. Lets face it, government ownership means that Air India can never be like a privately-owned airline, but it does have the advantage of a huge infrastructure and extensive network. If it is put back on the recovery track, it could even be privatised some day. The high-profile exits would then be just a distant memory, not a crippling damage as some would fear.  By the time Baldauf put in his papers on Budget Day, those around him knew that he was pretty much done with Air India. The unions and some employees didn't approve of him because he was an 'outsider' being paid Rs. 3 crore, while their salaries were delayed on most months. Even senior officials, including board members, came to think that he was unable to make it work. CMD Jadhav, the man who had pushed for new blood in the system says Baldauf and others (brought into the airline last year) had been unable to understand the complexity. "In a merger or acquisition, there is usually one strong partner who is able to call the shots. In this case, both are strong PSUs, who think their strategy is [the] best," he says. Captain Baldauf declined to speak to Forbes India for this story.  Vayalar Ravi is anything but new blood. The 73-year-old who entered Parliament four decades ago is a staunch socialist committed to protecting every job in government companies. As soon as he became the civil aviation minister in the latest reshuffle of Prime Minister Manmohan Singh's ministry, Ravi opened up communication lines with the unions of the national carrier. From morning to evening, Ravi spent nine hours a day for three days hearing out the labour. "He speaks our language," says George Abraham, general secretary of the Air India Employees Guild, the airline's largest union.
A hands-on trade unionist is now in charge of reform at India's national carrier. It may not be as bad as it sounds.