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BW Businessworld

Not Our Bill To Foot

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I don't know what you think but I for one cannot understand how the government can, even for a moment, consider giving a Rs 5,000-crore subsidy to Air India. Annually! What makes them think that the ordinary taxpayers would be willing to finance their years of mismanagement of the airline, year after year?

I have a copy of the note that the Ministry of Civil Aviation sent to the Prime Minister's Office, which shows that the suggestion is actually on paper and is the only option in front of the government if it is unwilling to take the unions and employees head-on.

Just as Manu Sharma's parole and the callousness around it makes me livid, so does the suggestion that we may be asked to finance years of pathetic management of the carrier, despite no end of reports and suggestions from people outside the system on how to resolve the mess.

Way back in the 1990s, former finance secretary Vijay Kelkar's report on Indian Airlines had foreseen the entire problem and had suggested many credible ways of avoiding the situation we are in today — all of which were studiously ignored.

The present Air India crisis is a combination of bad management over several years, but particularly over the last four to five years under the leadership of V. Thulasidas and under Raghu Menon, both of whom seem to have done precious little.

How could they allow the working capital limits to reach the limits they did and use a substantial portion of it to finance their cash deficit? Why did they do nothing to stop the alarming rise in losses? Why did they sign stupid agreements and bow to unreasonable demands from unions? Why did they not stop some of the excesses the airline employees have got so accustomed to? If they saw the writing on the wall, why did they not ring the alarm bells a whole lot sooner? Or, were they actually blind to the crisis? I certainly think one of them was.

In February 2008, Thulasidas, the then chairman and managing director (CMD), of the airline told Bloomberg Television at the Singapore air show that his airline may be "back in the black" next year, meaning in 2008-09. One only needs to glance at the results that are now public (losses of Rs 5,548 crore) to see how off the mark the man was. Leads one to believe that either he actually was unaware of the daily happenings of the carrier, or he was simply pulling wool over people's eyes to secure the extension he badly wanted then.

Thulasidas was succeeded by Menon who never really grasped the airline's real problems nor did he have the temperament to take them on. He kept insisting that a staff of 30,000-odd was "not a problem" and could be handled. How? Does he have some suggestions on how the hugely excess staff can be handled today?

Civil Aviation Minister Praful Patel, too, cannot wash his hands of the entire affair as he has been attempting to do. Who chose and then gave an extension to Thulasidas? Who chose Menon over Arvind Jadhav in 2008 (Jadhav had been called and selected for the post of Air India CMD by the committee headed by the Cabinet secretary)? Who insisted with a blinkered-focus that Air India and Indian Airlines needed no less than 111 aircraft even when they were finding it difficult to fill seats in the aircraft they already had?

Along with the fleet induction, Patel was also dead set on merging Air India and Indian, even when it was evident that tackling both would be difficult for a weak and ineffective management. Why did the management, led by Patel, insist on the merger when most officials within both the airlines were against it? How is a marriage supposed to work if the bride and the groom are both unwilling to enter it? Where are the so-called "savings" the merger was supposed to result in?

And, lastly, Air India's pilots and employees themselves. Which world are they living in? This crisis may not be of their making, but the fact remains that it is here and looming large. Instead of stubbornly refusing to give up any of their privileges or taking any cuts in their salaries, they would earn the respect of the public if they willingly agreed to it.

I think sentimental Indians would choose to fly their national carrier and rally around to support it, if the employees were to take such a stand.

Whoever else is or isn't to blame, it is clear that certain people owe us some answers. Expecting the public to foot this bill is ridiculous to say the least.

anjulibhargava at gmail dot com

(This story was published in Businessworld Issue Dated 30-11-2009)