Friday, August 31, 2018

Is the government running out of tricks to keep Air India flying?

Earlier this month, news about growing concerns over the salaries of employees of two Indian airline companies hit the headlines. Jet Airways, a listed entity, made public its financial woes, asking employees to take a 25% wage cut. Meanwhile, India’s national carrier, Air India — delaying payday every month for some time now with August seeing the longest delay — kept mum, apart from an internal memo that blamed “circumstances beyond control”.
No surprises there. As a public sector utility (PSU), this is how Air India is supposed to be: vague, and lacking accountability. Over the last few years, the incumbent government has struggled to figure out what it can do with the loss-making airline that has an albatross of debts around its neck.
It sought approval for a Rs 980 crore funds infusion in end-July. There is pressure to seek more. Surely, the sarkari bag is running out of tricks to keep Air India flying. The revival plan of 2012 has already seen more than Rs 27,000 crore being pumped in. This may be a good time to try thinking outside the box.
Take the recent efforts in March to privatise the airline, offering a 76% stake to the best bidder. It found no takers. Air India has a debt of Rs 48,000 crore on its balance sheet, and a similar amount in accumulated losses.
31/08/18 Suman Layak/Economic Times
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