Thursday, May 24, 2012

NEWS & VIEWS TODAY = MOST POWERFUL CEOs = JET AIRWAYS RESULTS (Dismal); Govt Holds the Key to success = 25-05-2012


NEWS & VIEWS TODAY
25th,MAY,2012

MOST POWERFUL CEOs – JET AIRWAYS RESULTS

1.       NEWS :-ECONOMIC TIMES has declared the list of Most Powerful CEOs. Of course, the list has all the predictable Names in it. The first ten are (1) Ratan TATA, Chairman, TATA SONS, (2) Mukesh D Ambani ,Reliance Industries (3) Kumara Mangalam Birla, The Aditya Birla Gropup  (4)Azim H Premji, Wipro; (5) Chanda Kocchaar, ICICI Bank (6)Deepak Parekh, HDFC (7) A.M.Naik, Larsen & Toubro (8)Anand G Mahindra, Mahindra Group (9)Adi Godrej,  Godrej Group (10) KV Kamath, Infosys & N.E.Chairman, ICICI. 

VIEWS : The CEOs deserve their Place well. Yet, there could be some differences of opinion. If TCS as a company is head and shoulders above Infosys for last several quarters – in fact, years, how can TCS’s Chandrasekharan be out of top 10 while Infy CEO is in. Agreed that KV Kamath proved himself already at ICICI and is brought into Infy only now. But the performance – and the CONFIDENCE in the future – exhibited always by the TCS CEO is way above the rest of the IT Pack. 

If Mukesh’s KG Basin had been a success, things would be different for the Reliance CEO. In my view, he has made the right moves. But, a big success in oil and Gas still eludes him. It might be any time ;Today; Or Tomorrow; Some tomorrow in near future anyway. 

Anil’s(at rank.11) fortunes are tied to Telecom sector’s fortunes. This is the popular opinion. I differ. Telecom is a dead sector for Anil. He will be there. But, can’t beat his telecom rivals easily. His fortunes are more tied up to Power generation sector. He is a sufferer there – solely because of Government’s mishandling of the power sector’s problems – and partly due to failure of KG Basin Gas supply. Government is neither passing a Good, efficient, effective Land acquisition Bill, nor making Coal India efficiently cater to the requirements of Power sector. 
Coal India’s motivation in serving the Power sector, steel sector etc remains dismal. Even NTPC has criticized it and rightly so. Government has to do something effective to push Coal India. If Coal India does not perform, hand over Coal India Management to the user Industries  in public and private sectors. At the minimum, there should be 3 directors from Power sector and 3 from steel sector on Coal India Board, if Coal India must  perform. Let someone from the user sectors be its CEO as well.

Sunil Mittal’s (at rank 16)shine is taken off by A.Raja and all those who are now grappling with 2 G issues. TRAI and DOT, which were the bulwarks of Telecom Revolution so far, are now aiming to strike a death blow on the same sector. Will India continue to have world’s lowest Tariffs or jump suddenly to the world’s HIGHEST TARIFF  regime? Reader’s can see yesterday’s article in this blog on the same. Today’s Economic Times Editorial has echoed approximately the same views.

Rajiv Bajaj of Bajaj Auto- is UNNECESSARILY TIED UP (EMOTIONALLY) to  Motor Cycles. His decision to drop off from Scooters in which Bajaj was numero Uno was BAD BUSINESS DECISION. Popular Management Dictum is – drop off from a sector, where you are not No.1,2, or 3. When Bajaj was No.1, it dropped off from scooters segment and almost handed it over on a platter to Honda, which is gunning for No.2 spot now in 2 wheelers solely on its scooters performance. Bajaj and Hero must both be in scooters as well. And, aim for world Market – not just Indian Market. If not now, when? If not YOU, who else?

2.       NEW-II : Jet Airways has released its results for Q4 and FY 2012 both. Some analysts frequently say that  – Jet has benefitted from KFA and AI’s plight. Nothing of the sort is visible in its results. From operational level, it is all in RED. The Net loss of Q4 is Rs.298.12 cr. The Net loss for FY 12 (on consolidated basis) isRs.1420.13 Cr.

VIEWS : Unless Government drastically reduces (a) the ATF price (and associated taxes) ; (b) huge other taxes on airlines by central and state Governments and (c) huge airport charges etc – All Airline companies will continue to be in trouble. Even the Airport entry fee is RIDICULOUSLY high. Government must have its vision very clear. It must enable more Indians (say, at least 3%) to travel by Air by reducing taxes and charges and forcing the FARES down to comfortable level. Then only, it becomes possible to run any airline Company- profitably-and with adequate capacities (filled). 

If AI is in trouble, the same reasons apply. Plus the Pilots, which comes last of all. Without reducing taxes and charges, whatever money Government pumps into AI, it will be waste of money.

If KFA dies, not all blame can be put on Mallya. 50 % blame lies on Governments too.

If Jet is running in losses too – ditto for reasons. 

If the TOP 3 AIRLINES of India, including that Air India of Government, are in huge losses – it must be the most serious concern of the Government.

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