Help yourself, please!

The persistent turmoil in the aviation sector coupled with the mounting losses quarter after quarter (all thanks to the increasing input costs) have left Indian aviators high and dry. Moreover, all the major players, which include Kingfisher Airlines, Jet Airways and Air India, are also over burdened with huge debts mounting over them. While, Kingfisher Airlines has a debt of about Rs.90 billion, Jet Airways has a massive burden of about Rs.150 billion on its back. Well, the less we talk about Air India’s financial standing, the better it is! All these financial obstacles have forced the domestic players to urge the Civil Aviation Ministry to relax the FDI investment cap from the current 49%. However, a pertinent question that arises is, will this proposed increase in foreign investment in the sector actually solve all the problems of the airlines? “Airlines need to ensure that they match capacity with demand. There are currently too many airlines, with too many seats, chasing too few passengers. This will require more effective management as well as consolidation in the form of mergers and market exits,” suggests Binit Somaia, Regional Director, CAPA. Surely, apart from foreign investment, the airlines should also look at route rationalisation and cost cutting as effective measures to overcome the crunch. Somaia also highlights the role of the government in pulling the players out of the quicksand as he says: “The government’s key role is to provide a regulatory framework that provides certainty to investors, which is currently missing in the aviation sector.” Thus, it is not only the financial support that is required, but also the various aforesaid measures that must be adopted by the bleeding airlines to help themselves.

Ratan Lal Bhagat

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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The brand was in deep financial trouble till just about three years ago.

Today, a new management, cash infusion and a fresh communication, are striving to bring back brand OCM. The Amritsar-based textile manufacturer, which missed out on its big chance is now back with a vengeance demanding its due. By Angshuman Paul

The 36 acre OCM Estate runs parallel to the Grand Trunk Road in Amritsar and its serene outer facade almost transports you to the time-honoured colonial era. But walk inside the sprawling premises and you would perhaps be almost startled at the sudden flurry of activity that will surround you. It is this perceptual dichotomy that captures the past, present and future essence of this worsted suiting producer more than anything else. For a brand that had almost disappeared from public life over the past few years, the zest and energy at the OCM Estate these days is almost tangible. Spanking new billboards and hoardings have mushroomed across the complex featuring the new goals for OCM’s managers; men and women walk about with a definite purpose and a swing in their steps; someone is talking animatedly into the phone about the recent boost in OCM’s institutional sales figures, while somebody else is showing off a PPT of the recently concluded OCM Dealer’s Conference in Dubai to an audience of premium dealers shortlisted to take forward OCM’s new retail ambition of opening exclusive brand outlets across India and even Europe... WL Ross, the US-based private equity fund management company, which acquired the loss-making OCM from the S. K. Birla Group for $37 million in 2007, is seemingly leaving no stone unturned to not just get brand OCM back on its feet, but to perhaps, even surpass its past glory many times over.

To understand the changes in OCM’s present, it’s important to appreciate the brand’s past. Originally intended to manufacture carpets (OCM actually stands for Oriental Carpet Manufacturing), OCM was started by a group of British merchants from the East India Company and has changed ownership thrice ever since. The first was when India’s oldest business family intervened and the S. K. Birla Group acquired OCM with an intention of manufacturing suiting materials. Under the Birlas, the brand name shrunk to its acronym OCM and emerged as a textile behemoth, with an annual production capacity of 8.4 million metres.

But losses were heavy and three years ago, when WL Ross & Co. bought the ailing company, fresh funds injected were first used to repay OCM’s mounting debts. Analysts say that though OCM was sick financially, it had created a huge brand value as a tweed suitings producer. Likewise, the first big investment that Ross made in OCM was of Rs.75 million for re-engineering OCM’s brand image in the Indian market.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
TSI exposes b school ranking scamsters Mahesh Peri of Career 360 and Premchand Palety of C fore. - For Complete Sting Operation Video Click Here

Pioneer Exposes the fraud called Mahesh Sharma and Mahesh Peri of Career 360 and Barbel Schwertfeger of mba-channel.com

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