There was no expectation this time. When a group of ministers (GoM) met last month on a 'turnaround plan' for shipwrecked Air India, it barely drew the attention an endeavour to save the country's number one aviation asset would.
So many times has Air India been through a cycle of destruction - airline messes up, government disassociates itself, losses and debt mount, government steps in, heads roll, government cobbles up new plan - that any intention to heal draws more mirth than sympathy, ridicule than belief.
Belief is in short supply in the government too - the latest plan has been in the works for about nine months now. As are business ideas and political will. The latest plan, like the three that preceded it, is to grease the airline's operations with cash. This is an operation that, in 2009-10, lost Rs 5,500 crore on revenues of Rs 13,100 crore and can't service its Rs 43,000 crore debt.
Yet, the GoM wants to infuse Rs 23,000 crore - of taxpayer money - into Air India by 2020, starting with Rs 6,500 crore this year. It also wants to restructure Rs 22,000 crore of its loans and give the airline a breather on repayment, for which it has sought a view of the banking regulator. In other words, the GoM, headed by finance minister Pranab Mukherjee, hopes that more cash will revive the airline.
"That's the problem," says aviation analyst Kapil Kaul. "The airline needs a financial restructuring plan, but a credible and comprehensive business plan, spread over five to 10 years, must come first." All turnaround efforts have been either silent or have not addressed the business plan adequately.
08/11/11 Economic Times
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