Shut down Air India

Having botched the privatisation of the public carrier, Air India, the Government is now being called upon to bail it out yet again. Air India has asked for Rs3,000 crores to tide over the latest financial crunch. Employees’ salaries, urgent bills, statutory commitments, etc, need to be met and AI has no money for these obligatory payments. But the finance ministry does not seem to be in a mood to oblige. And rightly so. How long can the taxpayers be expected to pay for the white elephant which refuses to improve its finances? It is true the UPA’s Praful Patel inflicted a huge financial and other damage on the airline, favouring certain private sector operators instead. Yet, the Modi Government missed the opportunity to disinvest in this relic of the socialist age. With a number of private sector airlines freely competing, the need for a cost-heavy public carrier no longer existed. But false prestige prevented Modi from selling off this white elephant. And finally, when he did undertake to sell off AI, the half-hearted attempt failed. No private party would put up money if the Government was loath to shed controls. Vast assets of AI ought to be sold off to pay the urgent bills. An inordinately large work force cuts a huge hole in its finances, with more than 250 employees per aircraft against 50-60 in the private sector. The only option is to close down the airline and hive off its assets and to reduce its salary bill through a voluntary retirement scheme. There is no need to throw more good money after a failed and, shall we say, doomed project.