Two Indian carriers, Air India and Kingfisher, have for sometime now been facing a crisis of a similar kind — financial — threatening their very survival. Both airlines had thus been looking forward to the government for support. When the Cabinet Committee on Economic Affairs met last week it took a decision that will cost the government in excess of Rs 30,000 crore and give Air India a lifeline but deferred a decision on FDI by airlines that Kingfisher has been seeking but would not have cost the government even a rupee. Strange are the ways of government’s decision-making, indeed!
The bailout has been described, throwing good money after bad but also discriminatory. Why should the government go overboard with respect to one airline and deny the same to another? There is, however, some merit in government extending financial support to Air India, because a significant chunk of the losses the merged Air India entity has incurred in recent years has been due to the government’s mismanagement.
It is an undeniable fact that Air India has been witnessing governmental intervention and interference at all stages — appointment of the board members and chair, and termination of their tenure midway; formulation of all major policies for Air India, and then changing them abruptly; decisions on important issues like aircraft acquisition and merger without understanding the full importance, implication and affordability, et al. There was no such loss inflicted by the government or its decisions on Kingfisher.
17/04/12 Tehelka
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