AI revival plan may fall short

The government’s revival plan for Air India seems quixotic — tilting at windmills. It has identified the star-crossed airline’s major problems — its huge debt of nearly Rs 48,000 crores and its need for governance and organisational reforms. It has proposed different strategies to tackle each of Air India’s businesses and implementing best business practices. These issues undoubtedly need to be handled, but the glaring problem the airline faces is its bloated staff and the fact that it doesn’t have aviation experts on its board. There are reputable people like joint secretaries and a few businessmen and BJP politicians. But Air India must compete with both international and domestic carriers that have experts in charge. Its bane is also that its staff goes on strike on the flimsiest grounds.

The airline management seems helpless in tacking these undisciplined, highly paid staff. Overstaffing is another major problem, with a workforce that is 14,000-strong. Its efforts to monetise its properties came a cropper as there were problems with title deeds.

Since selling the loss-making airline is out of the question politically, with elections around the corner, it would make sense for the airline to go to the Insolvency and Bankruptcy Code 2016, which helps to revive distressed companies in a time-bound way. The management also has to tackle the annual losses of almost Rs 6,000 crores, most of which is for payment of interest on the huge loans taken during the earlier Congress government to buy a large number of planes that were really not needed.