Air India non-viable, burden on taxpayer

It was no surprise that Air India (AI) was ranked the world’s third worst airline in an international survey on the basis of factors like cabin quality, service quality and flight delays. The airline has taken strong exception to the report and has termed it as a conspiracy to malign it. Aviation data company Flightstats, whose name figured in the survey, has since explained that it did not do the ranking but had only provided the data which was interpreted by a news agency. The issue, in any case, is not the exact place of Air India among the underperforming airlines. It is well known, without the support of a survey, that its services leave much to be desired. Delays are common, and reports of flights being held up for VIPs who did not report on time are not unusual. There are frequent complaints about deficiency of service in many other respects. Competition with private airlines, after the sector was opened up, was expected to improve the situation, but it has not. 

The issue with Air India is not just poor service but its very viability. The national airline has incurred huge losses year after year and its capital has been completely washed away. It is living on infusion of money by the government from time to time. A funding of Rs 15,000 crore was done three years ago, and the airline has not turned around. Year after year, it has reported losses and this year, too, no change is expected. The performance in the past quarters has confirmed this. The airline is weighed down by a debt burden of about Rs 47,000 crore. It is impossible to imagine that it will be able to repay this debt. Even according to the AI management’s projections, it is going to make a profit only by 2022. It is not run on professional lines. Political management of the airline has been the main reason for the poor condition it finds itself in. But the situation in unlikely to change.

There is no logic or reason for use of taxpayers’ money to support such a losing venture which has no hope of turning green in the near future. The rationale of a government running a commercial airline is weak. No public interest or social purpose is served by it. It amounts to wastage of valuable resources which can be more productively used for other purposes. The best course for the government is to go in for divestment of the airline and ensure that no more public money is wasted on it.

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