High time to privatise Air India

It makes no sense for the government to keep infusing thousands of crores of rupees each year to keep Air India alive in a sector which is dominated by the private sector to the extent of 86% with most of them making money, servicing their shareholders and creditors, besides offering better flying experience to the customers than the state-owned carrier. In fact, for most of the customers, Air India is a last choice while its creditors — the banks — take comfort only from the fact that the national carrier is owned by the government, just like them. Both live merrily in the hope that ultimately, the government must save them, courtesy tax payers. The government must be complimented for mandating Niti Aayog to suggest a road map for the bleeding airline, essentially meaning privatising it.

While top voices from the government are supporting the outright privatisation, there are bound to be vested interests among the political class and bureaucracy which could stifle the plan, as was done with similar proposals in the past. With Niti Aayog Vice Chairman Arvind Panagariya setting a kind of timeline of this year itself for execution of the sell-off plan, the government is sending the message loud and clear that it means business this time around. And rightly so. After all, whose interest is being served by a debt of Rs 52,000 crore, which is getting heftier annually by Rs 4,000 crore? Warning of “massive” protests by different employees’ unions is no surprise because the sheer mention of privatisation could mean a sense of insecurity among 21,000 employees who are used to security of a government job with the least amount of accountability towards passengers.

There is no point for the government to open any front with the employees who should be taken on board after assuring them of protecting their genuine interests while negotiating a deal. Even if privatisation is approved by the Cabinet within the next few months and a suitor is found, the road ahead would not be easy, given the kind of baggage that Air India carries on its wings. There are several subsidiaries along with a big question of who takes the debt. The buyer is not going to take the debt on its balance sheet; which means the Air India balance sheet must be cleaned up before it can be put on the block. That, in turn, would involve selling off some its assets like real estate and valuation of the infrastructure it owns. But there is no better time than now for AI privatisation.    

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