By Saloni N
Air India (merged with Indian Airlines in 2007) is a national carrier run by the Indian government and in a recent interview the civil aviation minister Ajit Singh made a remark that he would be open to privatizing the bleeding airline, later backtracking and saying that the timing wasn’t right yet.
But what several people don’t know is that on 15th October in the year 1932, Tata Airlines (the former name of Air India) made its first flight, which was a mail service over the route Karachi to Bombay, and on south to Madras.
Tata Airlines was a division of Tata Sons Ltd. (part of Tata Group) which in 1946 became a public limited company under the name Air India. It was later nationalised under the Air Corporations Act of 1953.
J.R.D. Tata also started Air-India International in 1948, and despite it being nationalized in 1953, it remained at the helm till 1978, running successfully.
The reason the privatization has come under so much debate is because the tax-payers money is being used to fund Air India which reported an annual loss of Rs. 7,500 crore during the year 2011–12.
Many experts blame the mismanaging as the reason for the losses, the other reasons being: the union of employees and corruption. But the band-aid measures aren’t helping with pilots calling in sick, labour disputes and more such problems arising. The airline has been plagued by rising fuel prices and costs, staffing problems and stiff competition.
Their woes are plenty and have been in the news from the past two weeks further damaging the airline’s already battered image. A recent new story reveals that Air India’s provision of allowing its employees to take two years of leave, without salary, has been misused with several of them exceeding their leave limit. Then there was also the flight whose panel fell off mid-air.
They have been trying to raise capital to accomodate the shortfall in government funding, which has sent the message that more rescue packages won’t be forthcoming.
The bigger question being raised is that with so many private players in Indian air and its dismal state (Jet’s losses, Kingfisher Airline’s fate), does it make sense today for the government to own an airline? Should the government pull the trigger and disinvest, starting the process of privatization? If so, will the two new collaborative air efforts of Tata further damage the haemorrhaging national carrier? Are there any viable investors to buy an airline with such huge debts or will the airline remain an albatross across the government’s neck, bleeding it dry?
These questions are very relevant but with elections staring the government in the face, major decisions about the Airline don’t seem to be in the offing.