Tuesday, May 23, 2017

In terminal decline, Air India’s privatisation is a rosy dream

The periodic clamour for Air India’s privatisation had surfaced once again recently. The government should ask itself a simple question: Which investor, in his right senses, would want to invest in an airline in such an advanced state of terminal decline?
The figures are frightening. The airline’s loans now total Rs 48,400 crore, or $ 7.5 billion. Debt servicing on these loans alone totals Rs 4,000 crore a year. With that sort of money, one could start a new airline, with none of the warts that Air India has. That is not the end of the story. The airline recently had to take loans to pay the salaries of its employees. One would say things could hardly get any worse than that. Really? Air India could not declare even a minuscule net profit at the time fuel prices had hit rock bottom. All they could claim was a puny operating profit of Rs 105 crore. Then, the Comptroller and Auditor General dropped a bombshell. Even those figures had been fudged. It was actually an operating loss of Rs 321.4 crore. This, sadly, is not the end of the story either. CAG had added that the financial figures had been fudged for three consecutive years. Privatise? Forget it. No one will touch it with a bargepole.
23/05/17 Hormuz P Mama/DNA