Involve Parliament in any move on Air India

Air India has made a net loss every year over the past decade, with its overall debt piling up beyond Rs 50,000 cores, and counting. The Union Cabinet was left with no choice but do something as the national carrier bleeds public money. The options before the panel of ministers range from strategic stake sale and retaining management to total privatisation, which could cause interminable delays. The serious issue is to secure the future of AI staff — the workforce of a once-proud airline that was a force to be reckoned with at a time the private sector didn’t have the strength to build huge infrastructure in a nascent independent India.

The future of the airline, whose domestic marketshare has been progressively whittled down with the rise of private carriers and possibly devious corruption, is now so suspect that no one wants to throw good money after bad. This lack of faith could make the response to unloading shares on the public fairly lukewarm. Being the national carrier, its future deserves the attention and scrutiny of Parliament as well. Air India simply can’t be sold without the panel bringing out a white paper on how losses could run into several billion dollars while Middle Eastern cities became busy aviation hubs revolving mainly around the huge Indian expat traffic. Even today, Air India’s revenue from overseas traffic is twice that of its domestic collections, which is why budget airline Indigo, with the largest marketshare in India, has said it’s interested in AI’s foreign operations. It must be seen if such an offer can be taken up without creating another behemoth that can run out of control, as Air India did.

The first question to answer is whether privatisation can be a panacea for all ills. The private sector has run up far bigger debts in core industries. The second question is what will happen to the employees. If it were to cost a couple of thousand crores to retire all the staff, so be it, as this is cheaper than keeping a workforce going as in other loss-making PSUs. Even in nations where market forces are more evolved as in Europe, there is space for public enterprises. But that means Air India has to be a well-run airline for it to be supported like the navaratnas. The ideal solution is, of course, to sell the profit-making parts of Air India, like its engineering division, to bring down the debt, write some more off and then offer the airline alone for privatisation, provided, of course, that staffers are looked after. There is no silver bullet solution to a behemoth that has been run into the ground. Deep thinking is required before finding the correct method to disband the airline, with the symbolically prosperous Maharaja as its icon.