AI strike enters 4th day, airline to operate just 39 flights

The AI management ordered the pilots to report for duty failing which it said the airline "is at liberty to take any action as deemed fit including termination of services"

New Delhi: Air India (AI) today further reduced its operations to 39 domestic flights out of its regular 320 as the strike by its pilots entered the fourth day inconveniencing passengers, reports PTI.

"We have curtailed more than 52% of our domestic flights and operating on only trunk routes that is too metro cities," an AI spokesperson said.

"Under the contingency plan, we have reduced the number of flights as we don't have any pilots," he said.

While 21 flights will be operated from the national capital, Air India's Mumbai operations have almost come to a standstill as the airline may operate just five flights between 9 and 11.30am, an AI spokeswoman said in Mumbai. The national carrier did not undertake any operations from Mumbai before 9am.

Sources sad the AI will be operating the Delhi-Patna-Varanasi flight AI 409 and Delhi-Mumbai-Delhi AI 805 on an aircraft which has been taken on wet lease to operate the two flights. Under a wet lease, an aircraft comes along with crew members.

AI has so far withdrawn or cancelled 120 domestic flights.

Yesterday, AI had operated just 12 flights from the financial capital. Normally, the state-owned carrier operates over 40 flights a day on the domestic sector from Mumbai using narrow-bodied aircraft.

Nearly 850 AI pilots are continuing their strike ignoring stern warning of sacking by the management and the Delhi High Court's decision to initiate contempt proceedings against them.

Striking Air India pilots yesterday said they were willing to go to jail and refused to call off their agitation.

The Delhi High Court yesterday initiated contempt of court proceedings against the pilots for their "utter defiance" of its order on Wednesday to call off the agitation calling it as "brazen and smacking of sheer arrogance".

A lockout of the airline and invoking of Essential Services Maintenance Act (ESMA) were also being mulled to crack down on the pilots.

The AI management ordered the pilots to report for duty failing which it said the airline "is at liberty to take any action as deemed fit including termination of services".

The management sacked two more pilots yesterday taking to nine the number of pilots terminated. Six pilots have been already suspended.

Indian Commercial Pilots Association (ICPA), which is spearheading the stir, is demanding a higher fixed component in the salary package, a Central Bureau of Investigation (CBI) probe into alleged mismanagement which has led to losses of over Rs16,000 crore and removal of Air India CMD Arvind Jadhav holding him responsible for the "financial mess".


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Equity funds may have suffered large-scale erosion in April

April outflows could be around Rs1,500 crore, estimates a fund industry CEO

For three months in a row, equity funds have recorded net inflows after many months of continuous outflows. After inflows of around Rs800 crore-Rs900 crore in December 2010 and January 2011, in February 2011 inflows jumped to a massive Rs2,495 crore. In one of our articles on this issue we asked whether there was a turnaround in the fortunes of the fund industry which has been suffering massive erosion since August 2009. (Read, "Money flowing back into mutual funds: is there a trend change?")   Our view was that it would take a few months more before we could say that a sustainable trend of inflows has started. Well, here comes the answer; though it's not the official one. In April 2011, around Rs1,500 crore in cash has probably flowed out of the equity funds, according to the CEO of a fund house. He sees no hope of money flowing back into equity funds in a major way.

According to sources in the fund industry, there could be two reasons for the resumption of outflows-a realisation that the equity market has not been a great place for returns over the past four years, and distributors' greed to earn more commission that has led to churning and no fresh inflows.

Money is partly flowing out because of investor behaviour. When a particular investment goes down sharply and then comes up to the purchase price after many months, investors tend to sell and get out. This is one of the reasons fund companies have cited for investors redeeming units and taking money out. Over the past three years, from 2008, the Sensex is actually down, which is not considered justifiable for the risk taken. Investors would rather prefer risk-free bank FDs which would fetch them around 9% with certainty.

However, distributors' greed for more commission is a major factor. After the ban on entry load from 1 August 2009, the mutual fund (MF) industry has seen a massive outflow of investments even as the bull market has continued. The truth is that the ban on entry load had dried up distributors' revenues, which led them to recommend unit-linked insurance plans (ULIPs) and company fixed deposits as the next best investment opportunities.

With desperate fund companies offering upfront commissions from their own fees, distributors have hit upon the idea of making customers churn, so as to get more of these upfront commissions. "As soon as one year and one day of any investment is completed and it qualifies for the long- term they try to convince clients to make an exit from the particular fund and invest in another fund, generating another round of commissions for themselves," says a CEO.

"If this is so, fund inflows won't turn anytime soon. Neither are market returns attractive, nor is the investor base widening," says a fund industry expert.



Mukesh Parikh

5 years ago

If you revisit following lines of above article "The truth is that the ban on entry load had dried up distributors' revenues, which led them to recommend unit-linked insurance plans (ULIPs) and company fixed deposits " it is very clear that the moment MF Distributor recommend ULIP or Co.FD, he becomes either Insurance Agent or FD Agent and certainly not MF AGENT..........


5 years ago


I wonder about the pathetic attitude of AMCs to blame Distributors for everything.

The fact is after abolition of entry load majority of Distributors had stopped advising Mututal Funds. And this is not at all wrong. They are the same "Homo Sapiens" like us, they also have their families to feed, they also have basic needs like food, clothing & shelter. My broker told me that they are now paid only @0.5% or even less for investments.
We can not & should not expect them to run charitable trust for our benefit !

How many millions can a person mint @0.5% brokerage ?

Further to it What all AMCs hava done. ?

They claim that they have expert fund managers, analysts etc. etc, but the fact is my neighborhood equity broker, who is a mere street smart guy and lacks any degree, recoverd all my '2008 Fall' losses within next 6 to 8 months, but all my mutual fund bought in 2007-08 are still in heavy losses. WHAT THESE AMCs are DOING ? WHAT IS USE OF THESE AMCs ?

SO THE NEED FOR AMCs is to GROW UP, SHOW THEIR OWN METAL rather than paying this blame game ?

After all its All business !



In Reply to MAYUR KULKARNI 5 years ago



In Reply to MAYUR KULKARNI 5 years ago

Dear Mayur,

You are absolutely correct.
For every thing distributors are held responsible.

I remember few years back I sold a SBI Magnum tax gain to lot of investors and it has underperformed since few years...Neither investor who have invested hurriedly in last week of March nor AMC who is managing the scheme is blamed ,,,but we are facing the blame..

I personally feel that calling distributors Greedy is not harsh but its abusive.


In Reply to pareshDeshpande 5 years ago

My Personal Observation is that there exists a deep & strong nexus between AMCs and Institutional Investors & Foreign Investors. Mutual Fund Investors Money is usually used to provide liquidity for profit booking by these institutional investors. THE ONLY USE OF MUTUAL FUND INVESTMENTS IS TO PROVIDE LIQUIDITY BUFFER FOR INSTITUTIONAL INVESTORS.


5 years ago

What is running the entire world?
Its "Greed".Then how can mutual agents can expected to remain away?
When Greed will get away,,he will not remain Human being but will become Mahatma.
I do not know about other agents,, but at least I am encourging my clients to invest a FEW PORTION OF MONEY for short term view with some market judgement.....In this year,,we have got 4-5% for more than 10 times.After paying of exit loads and short term capital gain tax ,,investor is getting more than 30% returns in 1 year

Finally...investor is happy as his agent is doing something for him....


5 years ago

Instead of analying the situation impartially, every time industry shifts the blame to distributors. Why they think every investor is so naive that after completing one year and one day he would agree to exit and re-enter to help distributor to earn commission?

Biju Daniel

5 years ago

It is not absolutely true that distributors are churning the funds and convincing clients to exit after one year one day. Your CEO's perception is wrong. He might be doing that. Market is ranging from 6000 - 5400 Nifty. The wise investor is booking profit from time to time. Long term investors in this market is not making any returns for the last 3-4 years. A large number of investors are in a negative returns, even over 20% if they stayed invested since Oct 2007. What about the trigger options in various AMCs. Are they churners?


5 years ago

The outflows are a reality. I have just one question. Is it that the distributors have not been able to persuade their customers?
Also, the article does not use the term IFAs. It uses the term distributors. Are all distributors all ethical or competent? Why is then money going out? Why are some IFAs getting so upset? Can anybody see the word IFA being used in the article at all?


5 years ago

Mutual Fund Houses should be taken to task for stopping sending annual statements to the investors.I have written several times about AMC not sending the annual statements to the helpless investors who feels completly cheated by their unilateral action.I am actively advising people not to invest a single pie of their hard earned money to these cheaters.



In Reply to NANU NATVERLAL MEHTA 5 years ago

Dear Mr.Mehta,

If you are unable to obtain the annual statement, you may ask your advisor regarding the same.

If you’ve provided your email id in all your investments, at any time you can get a consolidated statement from Cams website covering three main RTAs- CAMS, Karvy and Templeton. Click the below link and choose Consolidated Account Statement – CAMS + Karvy + FTAMIL

You’ve every right not to invest and also advice others to do the same. Bad experience with a teller should not prevent us from obtaining benefits the banking industry has to offer.

If your bitter experience with an advisor or an AMC is going to make you stay away and also others who listen to you, from mutual funds, you may also ending up loosing some of the good things it has got to offer.

It is better if a decision is based on one’s needs rather than strong emotions.

I’ve been cheated by stock brokers in the past. So I learnt how to deal with them instead of avoiding investing altogether in stock markets.

Market doesn’t care a damn whether I’m a part of it. I care because I see a potential for wealth building.


5 years ago

1) Comparing last 3 year Sensex returns with that of FD is not appropriate. One strong rise in market is capable of changing the last few years performance. Moreover advisors like us who primarily suggests people to participate in equity markets through SIP, have seen our customers getting returns that are superior to FDs in the last 3 years, despite market going nowhere.

2) Also we position equity as not less than a 10 year tenure product. Though ten year tenure may sound new for customers while getting into an equity product, given the nature of equities, this is the best way to minimise the risk and optimise the return. Right selling is not easy but that is no excuse for mis-selling.

3) While mentioning distributors’ greed for churning, a distinction can be made between categories of distributors. Banks and NDs primarily sell only one year SIP and at the end of tenure they may begin with another fund. The average SIP tenure of an IFA is 3 years.

4) If you notice, despite IFAs dwindling numbers, their market share has gone up. This shows that many who are in the profession are serious about it.

5) In my opinion, mis-selling is happening most in banks and least in IFA segment.

6) Customers redeeming the units because they are getting the purchase price back shows their ignorance and no efforts were made to educate them at the time of sale about the nature of product they are getting to. If they are doing so despite being educated, God alone can change the fate of our industry and Indian equity markets. Going by past trends, God has shown that this is his least priority area!



In Reply to Muthu 5 years ago

Dear friend,sorry for again making some negative comment,but this is fact which i would like to share with IFA friends,
we IFAs are most of times lured and most of times brain washed by fund managers to something which leads to mis-sell.but we should try to strudy and analyze facts by our selves,
most funds when they are unable to perform well they ask us to keep a long term view,but these long term views are just excuses which really never become a reality,
i keep in my mind the fall of japan nkkke which was 40000 few decades ago and now it is moving around 10-11k,same is about shanghai index which in 2007 was about 38000 and now it is just about 21000 and there are very remote chances of shanghai regaining that level and Nikke regaining 40k is a dream only.
what investors got out of equity in more then 2 decades in japan?
should not we keep this fact in our mind when we advice our investors for LONG TERM as we are adviced by fund managers.
my thinking is clear-equities should deliver 15% plus return if our corporates income is increasing every year bt that ratio.
but cheater promoters never share the real earnings with share holders,
this is real tragedy of indian equity market.


In Reply to Muthu 5 years ago

well said muthu sir.your comments need to be in the first place rather than that anonymous writer.
what actually GREED is?earning something for the efforts given?moneylife team should try to use their resources to find:(1)after the ban in entry load what is the percentage drop in the business done by the banks?(2)number of KYC applications initiated by the banks?(as there is no fees levied).(3)compare their selling of mutual funds and insurance products during this period and describe the why?if moneylife thinks mutual fund is a better avenue for investment.
hope some survey job is done and actual facts come into the picture not the shallow remarks targeted for IFAs'.
also write some article on the so said greed of the AMCs'.


In Reply to bhaskar 5 years ago

Moneylife has done all this periodically and more. You need to spend time reading, before posting


In Reply to Seema 5 years ago

Dear Mr.Bhaskar,

My comment needs to be considered as complimentary to the article and not as a substitute.

Being a regular reader of Moneylife, I can tell you that they offer fair view on issues and are open to accommodate different perspectives.

Nobody is above questioning or criticism. That is how it should be. I feel there is no need to take anything personally. Ofcourse, one can have a different view and Moneylife provides opportunity for airing the same in the comments section.

Sudhir Tripathy

5 years ago

Dear Sir,
Your article seems to be a passing comment and not based on facts and figures. Please refrain yourself from using words like greed. Let me ask you a question. If you are offered 1/10th of the present remmuneration will you continue your services as before????

There is a marked reduction in ULIP sales during the period you refer to. The FD of companies are not unlimited in volume. All IFAs are not Insurance sellers. The one year and one day matter seems to be far from fact as trail commissions are as good or even better than upfront ones.

The major factor is the ROI hike of Banks and gold investment. IFA se koi niji dushmani hai kya aapka?



In Reply to Sudhir Tripathy 5 years ago

Moneylife has quoted the CEO of a fund company. It is not their comment.
Besides, you seem to be new here. Moneylife is ONLY media company which has taken on Sebi and supported the distributors. You need to spend some time on this website reading earlier articles before commenting

Sudhir Tripathy

In Reply to Ashok 5 years ago

Hi Ashok,
My comment was intended for the author and not Moneylife. This time the author's name is in anonimity for reasons best known to you. Further you are expected to edit the article to eliminate rots from it so that your magazine doesn't arouse controversies. I say this because a similar situation occured days back if you remember the scores of comments and critisisms that poured in. At least that time the authors name was mentioned. For your info I have been a member with a registered mail ID and portfolio for more than two tears and has closely followed most articles. I am well aware of your noble endeavours in favour of IFAs too.

I suggest you to kindly go through all articles meticulously before posting them. I love your magazine and is a daily reaser of it. So I don't want its image to be tarnished.


sanjeev mukherjee

In Reply to Sudhir Tripathy 5 years ago

Well ... as an investor, I can say that the IFA community should not generalise. I have attended Moneylife seminars and I know in chats that each IFA has stories of colleagues who brazenly mis-sell. I heard a horrible one of a lady in Chennai who told investors to sell after the crash of 2008 (even when they correctly wanted to wait and hold) and put it in liquid funds. They lost twice over due to this IFA. Are you honestly saying there are no rogue IFAs and only Moneylife is bad-mouthing you guys? I am a little amused... its like biting the hand that supports you!! Maybe Moneylife will change its stand about all IFAs if you guys rant like this :-) he he!


In Reply to Sudhir Tripathy 5 years ago

What is this business of you and your magazine. I am a reader like you. You seem to think I am an insider. What a foolish assumption.
Besides, what about the main issue. I hope you have re-read the article and noticed that word greed is not used by Moneylife and sources in the fund industry. You should withdraw that silly allegation, especially since you claim to know about Moneylife's stand. But your last line shows you are totally ignorant and Moneylife and its activities. Maybe you started reading after posting in a hurry!


5 years ago

Returns that we see in Factsheet is actually a Illusion.Not a fact.Bank FD, Post office schemes are far more better than Mutual fund.Only rich people should invest in MF not middle class people and also people from Rural areas because when the time comes to take out the money in need MF always give negative return or much lower than FD or Post office..Middle class faimilies and rural people must stay away from MF



In Reply to shankar 5 years ago

I TOTALLY disagree. Money is money and returns are returns. There is full democracy and allare welcome. It depends on YOU (rich/poor/rural/urban etc) to identify advisors or do your own study to understand the rules & regulations and in the end make money.The future will stay with MFs and NOT FDs,Post etc as they are good only when the interest rates are high.What will you do if you are locked in for a period when the interest rates are coming down? Similarly markets/MFs ALSO go up and down.The difference however is that the time period is months & years in FDs etc but much shorter in MFs with added possibility of reallocating your asset allocation amongst liquid/debt/MIPs/Balanced/Equity/Sectoral/Commodities/Gold etc

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