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Privately owned AI will serve our pride better than an inefficient one

comment Updated: Jun 02, 2014 01:33 IST

Should Air India be privatised? The logical answer to that is a resounding yes. But before we come to the logic behind that answer, let us address the small but very vocal and highly influential minority that still swears by the socialist-era dictum of government-owned national airlines being symbols of national pride. The previous UPA government sanctioned a Rs 30,000-crore bailout package funded by taxpayer’s — in other words, your — money for the ailing Air India. Almost half that amount has already been disbursed. The result? Zero.

For the year ended March 31, 2014, the airline posted an estimated loss of about Rs 5,000 crore against the target of Rs 4,000 crore. It also missed its revenue target of about Rs 19,400 crore by a margin of more than Rs 3,000 crore. The promised turnaround is nowhere in sight. It makes no sense for a cash-strapped government, which is struggling to balance its books, to throw scarce resources at a company that shows no sign of mending its slothful and profligate ways.

Also, there is no patriotic or socialist merit in indulging a bunch of pampered, unionised employees who seem to be interested only in gifting themselves more and more freebies. Case in point: The airline, which provides free domestic and international tickets to more than 40,000 serving and retired staff, has now decided to extend this freebie to the legal heirs of its deceased employees.

Then, government officials across all levels routinely use their influence to get free upgrades and tickets, which they aren’t entitled to. These are just two among dozens of such examples. This is not only a colossal waste of public resources, it is actually a legally-mandated loot of your money. And this is no way for a sick company to claw its way to good health.

Just look around the world. Britain, France, the Netherlands and Germany have all privatised their respective national carriers without losing national pride. France, in fact, privatised Air France under Lionel Jospin’s Leftist government. All these are now among the better-managed airlines in the world. Across the globe, most airlines — even those with good managements — are losing money.

It’s the nature of the industry. In such a scenario, it will be safe to say that Air India will never turn around as a public sector company — what with bureaucratic interference in all decisions from purchase of planes to appointment of staff to demands for handouts. The solution lies in auctioning its shares to the highest bidder. A spiffy, well-run, albeit privately owned, but not necessarily profitable national airline will serve India’s national pride better than an overstaffed and inefficient Air India with red ink splashed all over its books.