Let Go of Air India
NEW DELHI: Is the time for state-owned Air India running out? The Maharaja is bleeding and its status in the intensive care unit certainly does not look very promising. Perhaps, Union Finance Minister Arun Jaitley, a powerful and authoritative voice of the NDA government and the most reliable Cabinet colleague of Prime Minister Narendra Modi, has let the cat out of the bag by strongly favouring disinvestment of the Air India.
Mr. Jaitley has been quoted as saying that the market share of Air India is just around 14 percent whereas the debt burden is a whopping Rs. 50,000 crore. Speaking at Dialogue@DD News programme, Mr. Jaitley said that Air India was flying at the cost of tax payers'money and that money could have been used in key sectors like education and health. "In this country, if 87 or 86 percent flying can be handled by the private sector... then they can also do 100 percent," he said.
Recalling that he had rooted for disinvestment of Air India during the earlier NDA regime in 1999-2000, Mr. Jaitley said that he had argued at that time if the disinvestment was not done, nothing would be left to disinvest. Since then, the government has pumped in more money into the loss-making national flag carrier but returns are dismal.
The bailout package was given to Air India by the then Manmohan Singh government which was to the tune of Rs. 30,000 crores and spread over 10 years.
In 2015-16, Air India showed operational profit of Rs 105 crore mainly due to low fuel prices and some rise in its passenger numbers as after the 2007 merger with Indian Airlines, there was only single state-owned entity -- Air India both domestically and internationally.
Civil Aviation Minister Ashok Gajapathi Raju last week said Air Indias books were "bad", but added that the government wanted the carrier to survive.
A Parliamentary Committee on Transport, headed by CPI(M) leader Sitaram Yechury, had termed the Air India-Indian Airlines merger as a ``hasty'' one which had been done without appling any mind. The then Civil Aviation Minister and NCP leader Praful Patel had described the merger as ``absolutely'' perfect which would take care of growing civil aviation market. The merger had been vetted by an Empowered Group of Ministers (EGoM).
Another blow to Air India came when the Central Bureau of Investigation (CBI) registered three cases into alleged irregularities in the purchase of 111 aircraft worth Rs. 70,000 crores, leasing of planes and surrender of profit-making routes. The agency would also inquire into the Air India-Indian Airlines merger during the UPA regime which allegedly caused losses running into thousands of crores.
Civil aviation analysts have often blamed poor management skills, serving VIPs by the national carrier as well as social and national obligations in the times of natural calamities, participation in evacuation programmes as being some of the areas not served by the private airlines. After the merger, Indian Airlines, one of the most cherished Indian brands in the national and international skies, ceased to exist and the Maharaja's glory seems to be fading with the passing of each year. It is time, the Modi government took a bold decision to let go of Air India into private hands so that a lean and mean entity can serve the country and the travelling public and in the process can sustain itself economically.