Commission should decide on Air India

The Asian Age.

Opinion, Edit

The options are privatisation or disinvestment besides operational choices like leasing out its management.

The only certainty about this long process of deciding on Air India’s future is the time has come to act.

The civil aviation minister has said that the government is open to all options on the future of Air India. Plans to restructure, refurbish or rebrand the national carrier have been in the air for a considerable period now, during which time its debt bloated to Rs 50,357 crores by the end of 2015-16, a mountain its chairman Ashwani Lohani thinks is “insurmountable and is at the root cause of all the problems that manifest as symptoms of all and sundry”. There were projections of a small operating profit for the last financial year, which may or not materialise. The question is what is to be done with an airline whose image of elegant service portrayed by a gracious maharajah is a relic of the past. The options are privatisation or disinvestment besides operational choices like leasing out its management. The problem is it is national property and, regardless of what is said by politicians and bureaucrats, the solution is going to be hard to find.

Privatisation has been suggested by several analysts as the only solution to an airline that has been mismanaged by bureaucrats even as politicians abused it for personal privileges. By throwing good money after bad in the form of a Rs 42,000 crore lifeline handed out five years ago by a government liberal with public money, the airline has been able to keep itself alive without going under like Swissair or similar epitome of efficiency and service pertinent to times when running airlines was profitable business. Hit by an illogical decision to merge Indian Airlines with Air India and make it a bigger behemoth of a mess and robbed of its returns from more profitable international routes by granting undue benefits to private airlines, Air India would have sunk without a trace had it been forced to repay even the interest on its debt like the private airline Kingfisher. Under the circumstances, disinvestment would be a bad idea as to thrust the shares on an unsuspecting public would be to tax people even more for sheer government inefficiency.

The best way forward would be to accept that something concrete has to be done. A methodology has to be found to address the basic issue, to do which the government must first accept that it has no business to be in the aviation business in this day and age. A commission comprising financial and aviation experts besides representatives of government and airline employees to study the issue in depth and come up with time-bound suggestions would be one way to take the issue head-on. If privatisation is the answer, how best to go about it would also be the duty of the commission to work out. Parliamentary approval would be needed for radical reform and those important legislators and stakeholders must be convinced what is being done is in the best interests of saving public money now being burnt to fly mostly bureaucrats and politicians in privileged comfort. The only certainty about this long process of deciding on Air India’s future is the time has come to act.

Read more...