Thursday, June 08, 2017

Don’t waste time trying to revive AI

Soon after civil aviation minister Gajapathi Raju talked of the Centre reviewing options to revive Air India, his colleague Jayant Sinha informed the country of a “robust” multi-dimensional plan to turn the national carrier into a “great global airline for India”. Sinha’s brave stance sounds platitudinous, too familiar.

For long there have been several suggestions for revamping Air India. Most commentators suggest the Government should cut its umbilical cord with the carrier. It was referred to Disinvestment Commission in 1998; the then disinvestment minister Arun Jaitley advocated its privatisation. So did a 2012 study commissioned by the corporate affairs ministry. Again in 2013, the civil aviation minister rooted for privatisation; the move was blocked by the Opposition.
As the Economic Survey of 2016-17 eloquently put it, “Defying history, there is still the commitment to make the perennially unprofitable public sector airline ‘world class’”, although acknowledging that the exit is “difficult especially in a precocious, cleavaged democracy dominated by vested interests”.

However, there are signs of hope. With Niti Aayog’s reported recommendation for AI’s strategic disinvestment, finance minister Arun Jaitley’s assertion that if private airlines already carry 86-87 per cent of country’s air traffic, they might as well carry 100 per cent, and civil aviation minister Raju assuring that a decision for its “rejuvenation” will be taken within three months, a decision may be on the cards. The Modi sarkar could live up to Prime Minister’s oft-repeated avowal that the Government has no business being in business.

Of course, as Niti Aayog says, the Government will perforce need to considerably relieve AI of its ₹55,000-crore debt overhang to make it attractive for investors.
08/06/17 Raghu Dayal/Business Line