POLITICIANS KILLED AIR INDIA
Ihave often stated that while a large chunk of our population being illiterate is a tragedy, the bigger irony in the context of Air India has been that those who are literate have also failed to read the writings on the wall. Alas, if only the bureaucrats and politicians guiding Air India’s destiny could read the situation over the years, the great institution, founded by the legendary JRD Tata, wouldn’t have been in the mess it has been pushed into. It is thus an undeniable fact that Air India is today struggling to survive. The government can’t be expected to endlessly infuse funds to keep it operational. Something drastic needs to be done on an emergent basis to ensure the airline’s survival.
Read in this context, the statement of Civil Aviation Minister Ajit Singh, that Air India needs to be privatised, eminently makes sense. But the tragedy is that the statement has been made in a cavalier manner, without it being properly deliberated or stakeholders taken into confidence. This is not surprising considering that our ministers have, of late, become accustomed to making ‘ off the cuff’ remarks without ever being questioned or held accountable for them.
If we were to only look back at the last few years, we find that there has never been a lack of grandiose plans for Air India. Year after year, the people in charge and the airline’s multiple stakeholders have been speaking about the need to transform the national carrier into a premier airline. But their plans, instead of taking Air India to the promised heights, have invariably brought it down further. This is because the ministers, including Ajit Singh’s predecessor Praful Patel, have believed only in setting the rules, but not been interested in monitoring their final impact or in their implementation.
The merger conceptualised by Patel, with the proclaimed objective of “enabling the two government- owned airlines to jointly face competition”, has been an unmitigated disaster. It exposed how even reasonable and critical recommendations for the success of the merger made by consultants— infusion of equity, a stable leadership, manpower harmonisation and check on indiscriminate augmentation of capacity by foreign airlines— were inordinately delayed or ignored for implementation by the incumbent minister. Thus today, one can repose little faith in the ability of the Government in giving Air India a direction with even a modest chance of success.
Ajit Singh’s own tenure as civil aviation minister shows lack of adequate thinking for Air India’s revival or survival. If in April 2012, a Rs 30,000crore bailout package ending 2021 was announced to help Air India meet its operational requirements, in September 2012, the Government, while announcing the FDI policy permitting foreign airlines to acquire up to 49 per cent stake in Indian private airlines, specifically barred Air India on the specious plea that it had government as its shareholder. And now the minister says Air India needs to be privatised. Why can’t a one- time comprehensive view be taken, instead of numerous flip- flops which are only making the extinction of Air India a distinct possibility in the near future? The intrinsic value of the airline has clearly been eroded by the Government through its own actions.
Privatisation was an option, but many years earlier, not now. With Air India having been stripped of its assets in recent years, burdened with a huge debt of over Rs 46,000 crore, mounting losses, in excess of Rs 35,000 crore since the merger, and a unionised workforce, bulk of which has still not realised the gravity of the problem confronting the airline, one wonders who would be keen to acquire it?
As one who served the national carrier for over two decades, I can aver that the Government remains clueless about what ails Air India. It is of the mistaken belief that infusion of money and money alone is the panacea to all the problems. The reality is that mismanagement, government meddling in its day- to- day affairs, ministers trying to guide its destiny even after appointing their chosen bureaucrats to helm the airline, along with several other factors, have taken a huge toll and are continuing to do so. The need of the hour is to allow Air India to be managed professionally, as a commercial entity.
The logical course should have been for Singh to ask the Board of Directors— which now has luminaries such as Gurcharan Das, the former CEO of Proctor and Gamble and Professor Ravindra Dholakia of IIM- Ahmedabad— aided by experts in the business, to evolve a survival plan, rather than thrust his own ideas upon the airline.
A consensus as a prelude to privatisation will be impossible in our current political environment, unless there is a proper road map, and the plan is formulated by those who understand the business. Politicians, with their ad hoc style of functioning, have failed Air India far too much and far too often for their plans to instill any confidence or find acceptance.
The loser is Air India, as in the meantime its downward trajectory continues, even as the environment becomes more and more competitive.
Privatisation was an option, but not now. With AI stripped of its assets, mounting losses and a unionised workforce, who would want to buy it?