The wonder that is Air India

All men are equal, but some are more equal than others. Politicians, especially those from the ruling dispensation, are certainly most equal. Urban Development Minister M. Venkaiah Naidu’s wrath over the wayward ways of state-run Air India underlines this fact of life.

Perhaps for the first time the Honorable Minister realized that AI is a monstrosity, something the hapless customers of the public sector carrier realize every day. The realization made him furious, and hell hath no fury like a minister scorned. He tweeted immediately, “Air India should explain how such things are happening. Transparency and accountability are the need of the hour.” He also lamented that he “missed an important appointment.”

This is an unpardonable sin. How can AI be so callous as to let such a catastrophe happen? It’s okay that in May as many as 44,000 of its customers got delayed by two hours or more, but it is surely not kosher to make the Honorable Minister wait for an hour. The airline did accept its mistake and apologized to him. Minister of Civil Aviation A. Gajapathi Raju and his deputy promised a thorough inquiry into the delay. In our country, 1 is greater than 44,000. This is called the power of one.

There is likely to be some action; some heads may roll. But will the power of Naidu, and of his government, effect real change, the change with salutary consequences? Given the Narendra Modi regime’s attitude towards public sector undertakings (PSUs), that seems unlikely in the foreseeable future. For that real change could only be privatization, something the regime is not comfortable with.

Well, to be fair to the government, it has not exactly ruled out the selloff idea. In April, Minister of State for Civil Aviation Mahesh Sharma had said in an interview that the government wanted to scale down its stake in the state carrier to below 51 per cent. Unfortunately, the plan has not taken a concrete as yet.

Early this month, Raju said, “Its [Air India’s] books are so bad. I don’t think that even if it is offered, anybody would come for it.” That’s right: the accumulated losses are worth Rs 28,000 crore, while the debt is in the region of Rs 50,000 crore. The Rs 8-crore operating profit that he boasted was primarily on account of lower fuel prices, a result of the cheaper crude, and the Rs 30,000-crore bailout package that the United Progressive Alliance government had cleared earlier.

Air India Ltd’s chairman & managing director Ashwani Lohani has blamed the previous government for the airline’s troubles. At the heart of the problem were a messy merger and the purchase of aircraft worth billions of dollars. “You merge two profit-making organizations [AI and Indian Airlines]. Look at 2005-06—both organizations were in profit—and 2006-07: the losses were Rs 600 crore. Then the losses went to Rs 1,200 crore, then they jumped to Rs 7,000 crore,” he said in a recent interview to Doordarshan.

“This Rs 50,000 crore has accumulated because of legacy issues. It’s not [something] for which the company or its employees are responsible,” he said, adding, “It will take decades to wipe that off.”

Even such a depressing statement looks a bullish assessment against the backdrop of the functioning of the government-owned airline. Venkaiah Naidu’s flight got delayed because the commander of the aircraft concerned was reportedly held up in a traffic jam. It’s a lame excuse because commanders are stipulated to report at least an hour before the flight. But who’s bothered? After all, AI is a sarkari company with sarkari work ethic and strong unions.

Unsurprisingly, AI lags behind private carriers in terms of performance. Firstpost.com reported: “According to the latest data for May put out by DGCA, only 74.3 per cent of AI’s domestic flights arrived and departed on time in May at metro airports. This means roughly every fourth flight was delayed last month. Compare this to 90.2 percent on time performance (OTP) by AirAsia, 85.1 percent by Vistara, 83.1 percent by IndiGo and 82.3 percent by Jet Airways at the same airports and it is clear that private airlines are managing their OTPs far better.”

One has to be a dogmatic, doctrinaire socialist to believe, in view of these facts, that there is any possibility of AI’s revival. Therefore, privatization is the only real solution. And that, unfortunately, is not on the cards.

For, even if the books of AI somehow get cleaned up, public sector enthusiasts would ask the question: “Now that it has revived, why sell it?”

The long and the short of it is that AI will remain in the public sector, at the expense of the exchequer and customers. Meanwhile the occasional discomfort caused to the deities like Venkaiah Naidu would be deftly dealt with.