Is the aviation minister crying ‘Wolf’ on Air India?

At last it looks as if the government might be making a genuine effort to sort out the problems of its ailing Air India airline. A rescue plan is being finalised by ministers involving Rs5,000 crore ($1bn-plus) new equity that would be paid in tranches over three years.
“This is a fundamental call (to Air India) that there must be a turnaround or the government is not going to support you – it is not a carte blanche,” Praful Patel, India’s aviation minister, told me a few days ago. The airline must, he said, cut costs and increase revenue or it would not get the rescue package that will probably be paid in tranches over three years.
How many times have we heard that before! Is Patel crying “wolf” or is it for real? I should maybe have written “surely not again”, instead of be “at last”, in the first paragraph because there have been many failed rescue attempts over more than 20 years. I remember Ratan Tata and Rahul Bajaj (who head broadly successful business groups bearing their name), being put in charge of what were then two airlines in the 1980s by an over-optimistic Rajiv Gandhi, then the prime minister.
There have been odd spurts of success since then, but now there are heavy losses – Rs5,000 crore ($1bn-plus) in the year to last March, and a similar figure is expected for this year unless savings are made. Patel has said he’d like to sell the airline, but has been told by the government to keep it flying.
Air India is notionally India’s national carrier, but its real role for decades has been to line the pockets and make life comfortable for those directly involved in its affairs – from ministers and bureaucrats, who get kickbacks on aircraft and other orders and benefit from freebies and powers of patronage, to top executives, pilots and other staff who often don’t work but do block change.
If the airline also carries non-government passengers, that is a bonus for India, but it is not the real reason that those in charge want it to continue flying.
09/09/09 John Elliott/Riding the Elephant

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

Categories: NACIL Sep 2009