A crisis, still

End of pilots' strike does not solve the Air India problem. Govt must take the hard decisions

The de-recognised Indian Pilots' Guild has decided to call off its nearly two-month-long strike after Tuesday's Delhi High Court directive, but the government would do well to acknowledge this: the end of the strike is going to help neither Air India nor the taxpayer. Resumption of full operations will only mean a return to status quo. Unless AI reforms or is forced to, it will continue to make losses. Only a transformative rethinking of AI that entails immediate disinvestment and downsizing of the behemoth can make a difference. Can the government, so far the bearer of the bottomless bag of goodies for AI, take those hard decisions?

It is the government, after all, that has made AI the exemplar of chronic financial irresponsibility by bestowing on it limitless largesse and providing it with a sovereign debt guarantee, while the carrier has reiterated its wasteful ways, for instance, offering free or subsidised travel for extended families of its staff. The latest package of Rs 30,000 crore had come with the attached caveats of 90 per cent on-time performance, 73 per cent passenger load and improved yields. By all accounts, that was a tall order for a carrier that met total cost on only two of its 175 domestic and international routes in Q1 and Q2 last year but did not hesitate to give performance-linked incentives to its perpetually underperforming employees. This strike alone has caused AI a revenue loss of approximately Rs 600 crore. As adverse circumstances have inflicted a loss of Rs 10,000 crore on the civil aviation sector for FY 2011-12, the civil aviation ministry can ill afford to ignore the troubles of the larger industry while it fusses over a strike irrelevant to solving AI's problems. AI must be fixed, if not abandoned, to help the civil aviation sector.

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