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No Question of Closing Air India, says Government

New Delhi. “There is no question of closing down Air India,” the Government has declared.

After some questions were raised in Parliament about the viability of continuing several state-run sick companies, including Air India, Minister of State for Civil Aviation Mahesh Sharma observed recently that the airline will not be closed as it was important to have a national flag carrier and that the Government was propping it up by infusing funds.

To recall, the airline appropriately commanded the respect of a ‘maharaja’ among international carriers till the late 1980s but its performance has steadily been going down, ever since actually its elegant logo was changed from Sagittarius – this is mentioned not as a lucky charm but to indicate a timeline – and the airline’s management structure was fiddled with. Merger with domestic carrier Indian Airlines later gave the international carrier a crippling blow.

Air India now runs both domestic and international flights, and many of them get delayed due to no-show by crew, or one problem or another. The airline has failed to tackle employee indiscipline.

Meanwhile, the Prime Minister’s Office has also sent a point by point query to Air India as to why it was not able to turn around and how long would it continue to make losses. But this has been a routine exercise for years and nothing much is likely to come about unless there is a top to bottom change in work culture and some hire and fire. One old Air Indian said that even the attire of the aircraft crew, particularly the sari, needs to be made elegant as it used to be in the good old days and its existing loud black colour should be discarded.

It may be noted that as part of the restructuring plan in 2012, the Government has already put in Rs 18,400 crores (about US$ 4 billion at applicable conversion rates over time), and another Rs 12000 crores ($ 2 billion approx at current exchange rates) are to be infused as Government equity till 2020-21.

India’s central Government owns about 250 companies, and Air India is among the top ten in making losses. This is despite the fact that foreign airlines flying to and from India make money. Some people have advocated ‘reservation’ of several routes only for Air India, as it is not able to face competition.

In all fairness, it has to be noted that several state-run companies have played a key role in industrialisation of India. The problem is that they have failed to operate in the evolving competitive environment and have become economic liabilities.

© India Strategic