The most sensible decision for the Government is to close down Air India or lease it out to anyone who wants to run it. It has no bearing on the security of VVIPs or the pride of the nation. Both are hollow excuses regimes present
It is a never-dying story. Air India epitomises the adage that the Government should not be running a business. The airline’s losses increase by the hour. The more it flies, the more it loses. But those who were responsible for the disaster have, instead of being penalised, adequate rewarded.
Accumulated losses have crossed Rs 33,000 crore since 2007 to the 2013 financial year. The 2013-2014 period is to add losses by another Rs 3,900 crore. Air India has a debt burden of Rs 43,000 crore. Total losses are possibly under-estimated and may be around one lakh crore rupees.
The Supreme Court in September 2012 issued notice to the Union Government and Air India on a petition seeking probe into the ‘unnecessary’ purchase of 111 aircraft costing Rs 67,000 crore.
It is intriguing how a profit-making public sector firm, a leader in the domestic market till 2001, was in a planned manner destroyed by largely a few bureaucrats such as V Thulasidas, Raghu Menon and Arvind Jadhav, who were made its chairman and managing director despite the fact neither of them had any real knowledge or experience of running an airline business. The Comptroller and Auditor-General and a parliamentary standing committee had raised questions on it, but they were ignored.
The Centre for Public Interest litigation has also sought an inquiry into the decision to lease aircraft, that again dented the exchequer by thousands of crores of rupees. It also demanded probe into the national carrier giving up profitable routes.
The mounting losses are to be made over by the infusion of Government funds, as equity — that means it is sunk forever, to the tune of Rs 30,000 crore — equal to the budgetary allocation for the Mahatma Gandhi National Rural Employment Guarantee Act. In reality, more the losses it has, more it enjoys Government patronage because it is almost a cash cow for the bureaucrats. They misguide the Government on so-called security needs to keep the airline flying. There are numerous instances where national carriers, including Sri lankan Airlines, have been leased out to foreign airlines.
The aircraft, purchased just six years ago, will be sold for a meagre Rs 2,135 crore, which works out to Rs 427 crore per aircraft.
The price at which the Maharaja will sell the aircraft is a mere one-third of the Rs 1,400 crore spent on purchasing each in 2008, during the term of Mr Raghu Menon. It had raised eyebrows then and is raising it again. Mr Menon was closely associated with the liberalisation of traffic rights to the Gulf, the US, the UK, China, France, Germany and Canada. This enabled international airlines to increase their market share at the cost Air India. These agreements were criticised by Parliament’s Committee on Public Undertakings and the Comptroller and Auditor-General of India.
Mr Thulasidas as the CMD was responsible for the the merger of Air India with Indian Airlines. The decision has been criticised by CAG. During his tenure brand new aircraft worth billions of dollars, both Boeing 777s and 737s, were kept parked on the ground for months resulting in hundreds of crores of losses every month.
Mr Jadhav gave away prime routes like Kochi-Doha-Bahrain and Calicut-Doha-Bahrain despite the fact that the routes were running with 100 per cent of load. He had also withdrawn flights from 32 profitable routes to benefit private airlines, ordered crockery worth Rs 12 crore and repainted the aircraft thrice. There are many more actions of his that are alleged to have mounted the airline with further losses.
The Central Information Commission has asked the Union Government to disclose all details relating to the removal of Mr Jadhav as CMD in August 2011, in response to an appeal by RTI activist SC Agrawal, who was denied information on the ground that it was classified.
The CAG said that the mega acquisition of aircraft, failing to synchronise lease periods of aircraft with the delivery of new aircraft and settling for only Boeing aircraft instead of a mix of Airbus and Boeing, and purchasing 68 aircraft instead of the required 28, were some of the major reasons for its mounting losses.
Air India is a flying mess. During the last decade nothing has been done to take it out of the red. Rather during the last two years 37,000 additional seats to Abu Dhabi was doled out.
The most sensible decision for the Government is to close down the airline or lease it out to anyone who wants to run it. It has no bearing on the security of VVIPs or the pride of the nation. The best security would be to save the nation of corruption flying in the air. And, national pride is no more served by Air India.