Privatization is the way to save Air India

Privatization is the way to save Air India


The debate on Air India privatization is not something that has started today. It is going on from last two three years with no solution. With the change in government who has made its base on promise of good days, the debate on Air India privatization has started again. Aviation industry as a whole is having a tough time, and Air India is suffering the most. Seeing the current scenario, what do you think, Is privatization the only way to save Air India?

Yes

• Government has been pumping money like anything in Air India and has almost infused Rs 12, 200 crore of equity till this year. Still, there is no change in airline performance.

• Air India is expected to post a loss around Rs 6,000 crore in 2014-15, so who will suffer the burden of these losses.

• Apart from losses, the company has got a huge debt of more than Rs 49,000 crore, and only a bold action can ownership can change the condition.

• Government can start the privatization process by diluting a part of Air India’s stake so that it can cover up a part of its losses made in the airline company.

• It is the taxpayer’s money that is pumped into revival of Air India that is showing n signs of turnaround, and in such a case it is best to privatize it

• Competition is increasing in the aviation industry, and the government doesn’t have funds or other resources and technology to bring in a change.

• There are many other sectors that need funds like railway, economy, infrastructure, and it makes no sense infusing money on a state-run airline.

No

• Let alone privatization cannot bring any miracle in the position of airline company. The problem is not funds, but the problem is the mechanism in which the airline is handled.

• The more effective reforms can be implemented. The government should push more for getting the open access to ATF. It is eating up the profits of Airline Company.

• Air India made an association with Start Alliance that will increase the company’s revenue by 4-5%. Government should look for more such associations.

• If Government will opt for privatization at this time, it has to lose all the investment that is has made on the revival of company.

• Revamping of company is more essential and then only it will be able to fetch good price in the privatization deal.

• Government should work out to sort out the problems resulted out of the merger of Indian Airlines and Air India.

Conclusion

Air India needs privatization, but at this moment it is more of time. It is essential for the government to implement some measure to improve the health of company. Then only it will be possible to get good deal in the future. Also, government should opt for a strong management, and should stay away from interfering in the decisions. It will make sure that the future decisions taken are in the best health of Airline Company.
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    Discussion

  • RE: Privatization is the way to save Air India -ROHIT (07/24/17)
  • Yes, air india should be privatized to save it. If it privatized there will be less political interference, they can take their decision quickly and independently and if government sells its stake it helps government to deal with the loss of infusion of money.if privatized resources can be utilized properly and effeciency will increase. If it privatized competition will increase so more chances of update itself, can do better with new technologies and resources.
  • RE: Privatization is the way to save Air India -DALIP NIM (07/20/17)
  • MAHARAJA – TRANSFER OF SERVICES FROM PUBLIC TO PRIVATE OWNERSHIP AND CONTROL.
    Air India, by itself, was never on the verge of collapse or nosedive crash. The present scenario has risen due to the inept decision of merging Air India and Indian Airlines by the UPA political masters, unopposed by the NDA in 2007.
    Today, to get out of the situation for fishing-out Maharaja of troubled waters, the NDA political masters have, in principal, decided to privatize the National Carrier. Will this be an apt decision by the present regime?
    PM Modi Sarkar has been using the international services of Maharaja for rejuvenating India’s global reach, image and appeal but has failed to turnaround the National Carrier into a profit making PSU during the past 3 years of their rule. Is this not a perceived major failure of the NDA government during its present governance? Has the route of privatization been taken by the NDA government is to push their lack of success under the Red Carpet of the Maharaja? Changing the Minister of State for Civil Aviation has not come handy for the present government.
    Certain vital issues need to be addressed:
    1. Who is responsible for the debt trap of the Maharaja i.e. the ruling political class, the bureaucrats, the self-serving executives and professionals of Air India Limited or the depressed morale post-merger and lack of competitive spirit amongst the employees?
    2. Is it not true that Air India is still economically viable?
    3. Is privatisation the only remedy for curing the ailing Maharaja?
    4. Why did NDA bring about strong opposition to the proposal of privatisation in 2013 and now forcefully pressing for privatisation in 2017?
    5. Why NDA did not oppose vehemently the merger of Air India and Indian Airlines and the purchase of new additional aircrafts which has led to misery and financial bankruptcy?
    6. Who is to be attributed the accountability for the gross mis-management of Air India Limited?
    7. Why has the NDA government’s revised turn-around plan not shown the desired results?
    It is a weak move to put the State-owned flag carrier Maharaja, the pride of the Nation, in private hand(s). A more viable decision would be to separate the International and Domestic Operations and put then under independent Managing Directors reporting to an Executive Chairman of the Company. Professionalism, merit, efficiency and integrity should be the criteria for selection of the key executives at different levels. Each of the independent International and Domestic Wings should be given free hand, without Government’s unwarranted interference and influence, for achieving their targeted revenues.
    The government should infuse equity capital one last time to bring down the debt and give another opportunity to Maharaja for regain its past glory as the National Carrier.
    - DALIP NIM
    Retired Employee.
  • RE: Privatization is the way to save Air India -Deepa Kaushik (07/08/14)
  • Privatisation is not a solution to the Air India concern. The problem doesn’t lie with the funds that the government is pumping in. Our Government has already helped the aviation industry with sufficient funds to support the smooth running of the airlines. With all the necessary support, the role lies in the hands of the management to utilize the funds and the resources in a judicial way.

    Privatisation would just convert the sector, and government can wash away its hands from the funding process, but that is not going to be a real help for the Air India. It is the way government can escape and save its expenditure. But privatisation would be a long term loss for the country, as slowly privatising the different industry one by one will slowly lead us to the age of slavery.

    All that Air India requires as of now is an efficient management which has the potential to utilise the available funds. The co-operative approach of the government, the management and its employees is the only possible way to save the Air India from dooming down.