In the past, Air India divestment was stalled either due to opposition by staff, political interference or lack of political will. Now, disinvestment of India’s national carrier has hit a hump due to lack of interest from bidders, non-viability and sentimental value. Rashtriya Swayamsevak Sangh (RSS) chief Mohan Bhagawat had voiced his discomfort over the sale of Air India stake to private companies. Apart from matters of ‘national and emotional pride’, Bhagwat’s argument makes a lot of sense from commercial perspective. Pointing to its tangible and intangible assets, which according to him provided the base for running a company profitably, he suggested that Air India’s troubles emanated from the fact that it was run poorly. The big question, therefore, is that if private companies can run Air India profitably can’t the government do the same? When several national governments own airlines and run them profitably, then why not India.
Prime minister Narendra Modi may have to take industrialist Anand Mahindra’s suggestion that a person with the “potential & passion of an E Sreedharan” should be asked to helm Air India and to turn it around. That is clearly sound suggestion considering the deep miré that the airline has dug itself into. Not only should there be a person of commanding talent and commitment leading the organisation, the person must be given a free hand that does not make him a tool in the hands of politicians.
To date, efforts have been made to turn around the beleaguered national carrier. But, good news has failed to come on that front. Previously, the UPA and now the NDA have sunk hundreds of crores of taxpayers’ money to sustain this airline but it has continued to bleed. Indeed, it is strange that Air India is running into losses at a time when airlines are witnessing a surge in the number of passengers. Private airlines like Jet Airways, Go Air, SpiceJet and IndiGo have entered the aviation business much later, learned the ropes of the business, and prospered. Of course, there have been cases where companies closed shop or just disappeared. Some sharp entrepreneurs like GR Gopinath monetised Air Deccan.
The sale of Air India in its present condition may not happen in a hurry. Usual suggestions range from writing off the entire accumulated losses of Rs 46,805 crore to enable bidding to begin. There have been strong proponents of selling off Air India 100 per cent instead of offering just 76 per cent. Another suggestion varied from inclusion of non-core assets to prime properties in the country and abroad to make the proposition more attractive. Achieving the financial year’s disinvestments target of Rs 80,000 crore alone need not be the pre-eminent reason for selling Air India.
Privatisation of global biggies like British Airways, Lufthansa, Qantas will have to be considered as prime models before offering Air India to private hands. The vast domestic and global network to key destinations, assured time slots and space in prized airports with airside access, hangars, engineering backbone and infrastructure, trained engineers and flight crew, bilateral rights and assurances of continued protection of those rights, huge aircraft orders with delivery timelines, a topline revenue of around Rs 25,000 crore have to be ensured to get better valuation. All this has been tried out over last two decades but the company only bled and did not make money. Let a top private honcho take charge of this airline, turn it around, and list the company on global bourses — essentially plump it before it can be put on sale.