‘The additional loss of Air India is on account of inefficiency’

Civil aviation minister Praful Patel has come under fire on many occasions for the sorry state of Air India. He has been pulled up in Parliament for giving access to foreign airlines at the cost of the state-owned airline besides interfering in its business decisions such as acquisition of aircraft. In an interaction with The Economic Times, Mr Patel dwelt on various issues . Excerpts:
What is your response to charges about merger of erstwhile Air India and Indian Airlines being blamed for the poor health of the merged entity?
After merger, if some people in the company are out to defeat the purpose of the merger, what can one do? It was not the first merger in the Indian aviation industry. Kingfisher was merged with Deccan and Air Sahara with Jet Airways.
Should the government privatise Air India?
If you want good valuation, you must have a good balance sheet. This was one reason behind the thought of merging the two government-owned airlines. The idea was given by experts. This way we will get better value. At that time people were getting good value and Jet went to market to get a good premium.
Almost 90% of the global business is run by alliances—Star Alliance, SkyTeam and One World. So one must join an alliance otherwise we would lose business. The best alliance in the world is Star Alliance so it was chosen for Air India. Star Alliance wanted a strong carrier with good domestic network.
Accenture was appointed to give a road map. After it gave a road map, we went to the prime minister. I said, ‘Sir, this is my view. Please have a look.’ He got Montek Singh Ahluwalia and P Chidambaram and Accenture made a presentation. Everybody said it looked good. Then we went to CoS and then to EGoM. We had endless meetings with unions. At that time Sitaram Yechury was on the standing committee on transport, who advocated a merger.
26/08/09 Economic Times

To Read the News in full at Source, Click the Headline

Categories: NACIL Aug 2009