Lee Kuan Yew’s prescription is predictably drastic. He would “let Air India die naturally” he said, instead of breaking heads and making life miserable trying to revitalise it.
The government seems to clutch at the hope that despite being lumbered with a debt of about Rs 48,877 crore (Rs 17,360 crore aircraft loans and Rs 31,517 crore working capital loans). At the end of last March, Air India can be rescued from oblivion by selling 49 per cent of the equity to outsiders. Hard-headed realists are convinced the national carrier’s only destiny is to disappear.
IndiGo and the Tatas are said to be interested in buying shares. Other possibles mentioned are Turkey’s Celebi Aviation Holding, Bird Group, Menzies Aviation Plc and Livewel Aviation Services Pvt. Ltd. We have been here before. Singapore Airlines was once in the bidding but, sadly, we had to beat a humiliating retreat in 2001. Air India had hoped then to recoup its $70 million debt and raise money for the long overdue upgrading of its fleet of 27 aircraft through partial privatisation. But, Singapore’s veteran Lee Kuan Yew felt there was “too much vested interest” for a slight dilution of ownership to make any difference to operations.
SIA could not “change the culture” of the airline, he explained. “It was too ingrained”. There would be “too much opposition all down the line, within the company and in the government, in the civil aviation department and ministries” to drastic reform “because this is the airline that services them.” Singapore’s then president, the ethnic Indian S R Nathan, agreed that no airline could reserve jobs for a retired employee’s dependents or allow retirees to travel free. Buying some equity would be throwing good money after bad.
Four years later, Lee was sorry when a wholly owned subsidiary of the Civil Aviation Authority of Singapore withdrew from a multi-billion dollar tender to upgrade New Delhi airport. Caas’s Indian partner, Bharti Enterprises, believed it could do the job in 50 months and promised to indemnify Caas from penalties should the work take longer. But, Caas insisted on a minimum of 70 months. Lee’s advice was that Singaporeans must learn to take more risks.
Even the recent controversy over offering 49 per cent of equity to private investors draws attention to vested interests that do not want a viable, professionally managed commercial airline. Although the junior aviation minister, Jayant Sinha, made the announcement, explaining that the airline would be split vertically into four different sectors to facilitate sale by the end of this year, strictly speaking, the 31-member parliamentary standing committee on transport, tourism and culture hadn’t cleared the sale. Nor has it withdrawn its January 7 draft report saying this is not an appropriate time to divest the government’s stake. The MPs wanted Air India to be given at least another five years to recover, and reportedly gave no fewer than 11 reasons why it should remain a fully nationalised undertaking.
24/01/18 Sunanda K Datta-Ray/Free Press Journal
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The government seems to clutch at the hope that despite being lumbered with a debt of about Rs 48,877 crore (Rs 17,360 crore aircraft loans and Rs 31,517 crore working capital loans). At the end of last March, Air India can be rescued from oblivion by selling 49 per cent of the equity to outsiders. Hard-headed realists are convinced the national carrier’s only destiny is to disappear.
IndiGo and the Tatas are said to be interested in buying shares. Other possibles mentioned are Turkey’s Celebi Aviation Holding, Bird Group, Menzies Aviation Plc and Livewel Aviation Services Pvt. Ltd. We have been here before. Singapore Airlines was once in the bidding but, sadly, we had to beat a humiliating retreat in 2001. Air India had hoped then to recoup its $70 million debt and raise money for the long overdue upgrading of its fleet of 27 aircraft through partial privatisation. But, Singapore’s veteran Lee Kuan Yew felt there was “too much vested interest” for a slight dilution of ownership to make any difference to operations.
SIA could not “change the culture” of the airline, he explained. “It was too ingrained”. There would be “too much opposition all down the line, within the company and in the government, in the civil aviation department and ministries” to drastic reform “because this is the airline that services them.” Singapore’s then president, the ethnic Indian S R Nathan, agreed that no airline could reserve jobs for a retired employee’s dependents or allow retirees to travel free. Buying some equity would be throwing good money after bad.
Four years later, Lee was sorry when a wholly owned subsidiary of the Civil Aviation Authority of Singapore withdrew from a multi-billion dollar tender to upgrade New Delhi airport. Caas’s Indian partner, Bharti Enterprises, believed it could do the job in 50 months and promised to indemnify Caas from penalties should the work take longer. But, Caas insisted on a minimum of 70 months. Lee’s advice was that Singaporeans must learn to take more risks.
Even the recent controversy over offering 49 per cent of equity to private investors draws attention to vested interests that do not want a viable, professionally managed commercial airline. Although the junior aviation minister, Jayant Sinha, made the announcement, explaining that the airline would be split vertically into four different sectors to facilitate sale by the end of this year, strictly speaking, the 31-member parliamentary standing committee on transport, tourism and culture hadn’t cleared the sale. Nor has it withdrawn its January 7 draft report saying this is not an appropriate time to divest the government’s stake. The MPs wanted Air India to be given at least another five years to recover, and reportedly gave no fewer than 11 reasons why it should remain a fully nationalised undertaking.
24/01/18 Sunanda K Datta-Ray/Free Press Journal
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