GANAPATHI BHAT, AKOLA
The once “pride” of India, the Air India, is said to be on the verge of being privatised. The government’s flag carrier is reeling under a whopping 52,000 crore debt. The public sector giant, which has been incurring massive losses over the last seven years, is on a government bail-out. The AI needs to borrow 2,500 crore per annum to survive It is evident that the national carrier with the largest fleet of flights in India having 17 per cent international market share and 14 per cent domestic market share is looking down the barrel. The merger of Indian Airlines (Indian) and the Air India started the rot which remains to be stemmed. Irregular leasing of aircrafts and short–sighted sale of distressed aeroplanes has pushed the national carrier to the brink. Though AI fetched a revenue of 22,169 crore in the last fiscal year, the expenditure of 25,789 crore says it all. In comparison, major private airliners have focused on fine balancing the revenues earned with prudent spending. A debt ridden biggie like the AI can hardly afford to go on a buying spree with little transparency and accountability. Many solutions to prop-up the fledgling carrier was thought upon but to no avail. When reducing the debt burden through many means, for example through buying of equity shares by lending banks becomes almost impossible, the government had to look at the other way out. The National Institution for Transforming India (NITI) Aayog, under PM Narendra Modi’s chairmanship, has prepared a blueprint for the privatisation of AI. Hunt for a prospective buyer, domestic or foreign, with a deep pocket, will indeed be a herculean task. Now, the major point of interest seems to be whether the sale of AI will occur in a single stroke or whether the process would be a gradual affair. It looks like the government will opt for the former because obviously there is no fun in retaining the ownership devoid of stakes. The government may not consider it worthwhile to waive-off the debt to a potential purchaser. By putting on hold procurement of new Boeings, this government has indicated it means business unlike in the past when privatisation plans had to be aborted midway after an initial take-off. Many foreign state-owned airlines, which have made it big after being privatised, have shown the way.