Who cares for Air India?

Ajith Vijay Kumar

New Delhi: A black hole for tax payer’s money, a company teeming with disgruntled employees, an airline that routinely leaves passengers high and dry, of late Air India seems to be perpetually flying through an air pocket.

The troubles of India’s national airline are many fold and complicated. To start with the merger of Air India and Indian Airlines was ill conceived. The merger has often been termed as the "the root cause of all that ails the airline” and that is like "a marriage between two incompatible parties."

A parliamentary committee headed by Sitaram Yechury had also questioned the merger, saying that it had been done in haste, and had "given rise to so many problems concerning financial, administrative and operational (issues), which could not be foreseen by the people who took this decision." Former aviation minister Praful Patel oversaw the merger, but what has it achieved?

Consider this: In 2006-07, the year before the merger, IA and AI made a combined loss of Rs 740 crore. And since 2007 it has been incurring ever massive losses; it posted a net loss of 55.51 billion rupees in the financial year ended March 31, 2010.

The allegation is that the merger was pushed through to benefit private airlines on the most profitable Middle East route. As per bilateral agreements, only two airlines from any country are allowed to operate on this route and the merger created a slot for private players to operate.

Air India also has a debt of 400 billion rupees. Much of the debt stems from its 2006 $15 billion deal with Boeing and Airbus for acquisition of 111 planes.

Now even this deal is under the scanner. As per a report, the Comptroller and Auditor General of India has put a question mark on the deal to buy 50 aircraft from Boeing saying that the purchase was done without adequate due diligence or independent verification of cost-escalation claims by the manufacturers.

Not to forget the infusion of public money to keep the airline afloat.

On the operating side, the airline has stopped flying to 32 profitable routes in the last two years and no one exactly knows why?

The Air India employees’ union has time and again complained that the public sector airline is being bled to death to benefit the private players.

Figures also depict the same picture. As per a recent DGCA report, Air India has operated far less number of domestic and international flights last year than its private competitors. Jet Airways and its subsidiary, JetLite, operated 1,42,101 flights followed by Kingfisher Airlines, which operated 1,20,362 flights, leaving AI at the third spot with only 1,01,352 flights.

In terms of market share, the national carrier has now slipped to the fourth rank behind Jet Airways, Kingfisher and IndiGo.

Employees, especially the pilots, are another Achilles heel for the troubled airline. They have been routinely striking work for pay, perks and other sundry benefits. This time around they have also put in the angle of corruption by the top management of the airline.

But do they really care? As their strike is only compounding the troubles of the airline.

Undoubtedly, the new Aviation Minister Vaylar Ravi has quite a job at hand. But can he change the well entrenched system of considering Air India as the sacrificial cow of the country’s booming aviation story is the big question.