Jotting: It's DecisionTime
Problems, if not tackled and solved on time, have a funny knack of coming back to haunt. We are talking of the mood within the National Democratic Alliance (NDA) government to actively find a solution to the mounting problems of Air India, the national carrier. Its rising debt, stagnating market share, and low profits despite the airline’s best efforts and intentions to run and compete with private airlines, have simply not helped. In 2012, the then United Progressive Alliance (UPA) government had been advised to sell stake/privatise Air India. But it decided against the move and in favour of the financial turnaround plan or TAP. In 2014, with a change of guard at the Centre, the problems of Air India just continued despite the continued implementation of TAP that involves infusing a certain amount into Air India every year till 2021.
Now after three years of NDA rule, and the Central government having infused over Rs 28,500 crore into Air India, NITI Aayog has proposed a total privatisation of the national carrier. Union aviation minister Ashok Gajapathi Raju says, “All options are being explored”. What are these options? The first option is 100 per cent privatisation of Air India. Other options include going for a strategic stake sale, in which the government continues to own between 26 per cent and 51 per cent share and waves off the accumulated debt in excess of Rs 50,300 crore.
The recommendations made by the NITI Aayog cite some international examples — British Airways and Austrian Air — where the governments have successfully diluted their control and privatised the airlines. But such decisions were both tough and challenging.
A quick look at the history of privatisation of British Airways (BA), Austrian Air and Japan Airlines, tells us two things. One, the privatisation took several years and involved job losses and legal disputes. Two, since there was a will, the end-results were a success in each of the three instances. The plan to privatise BA was kicked off in 1981. It finally happened in 1987. Some 23,000 jobs were lost in the process (Air India has a total employee strength of under 21,000). Austrian Airlines sustained continuous losses between 2000 and 2008, before the Austrian government decided to privatise it. In July 2009, the Lufthansa Group purchased the airline, but after some controversy and enquiry by the European Commission.
To cut a long story short, even after the Union Cabinet takes a decision on Air India, the road to privatisation is expected to be bumpy and full of hurdles. Only a sustained will on the part of the government can turn the national carrier into a Maharaja. Its decision time now.
