The maharajas airs

As the government considers what can be done with Air India,all should keep at least this in mind: there can be no returning to the bad old days when government policy was set to satisfy the demands of self-righteous insiders who confused the national interest with their own. Nor can there be any returning to a time when state policy was so subservient to the governments commercial interests that it was indistinguishable from something written by representatives of publicly-owned companies. Representatives of Air Indias managers and of its (comparatively privileged) workers must be brought round to that understanding.

There are many things that have gone wrong with Indian/ Indian Airlines/ Air India/ NACIL. The first was the botched merger. It was optimistic from day one to expect that integration would go easily,and projections of alternative directions that the joint entity could strike out in appear to have been wild phantasms of the imagination. Then there is the companys sheer size in terms of manpower. It employs half a lakh people. Over 60 per cent of that number is permanent,the rest being contract employees. 50,000 employees. The worlds largest airline not the most profitable,not the leanest,the largest,the shareholders of which are muttering about flab is American Airlines. AA has 60,000 employees. With those,its 993 aircraft connected 171 cities,serving 80 million passengers a year,averaging 2,600 departures a day. Air India has 148 aircraft. Passenger figures for Air India are disputed,but it carries about 10 million. That isnt in the same league. Forget about the same league,theres some doubt whether its even playing the same sport. And yet,it has comparable numbers for employees.

Theres absolutely no doubt that something is going to have to give. Air India cannot go on swallowing the losses it is currently making. And while it,like other participants in the aviation sector,can legitimately complain that the governments policy on air turbine fuel which is kept artificially expensive to cross-subsidise other forms of oil and natural gas hurts its profitability. But any reasonable observer will be forced to the conclusion that Air Indias troubles stem mainly from its status as the governments chosen carrier and from the stagnation that has brought to its business decisions and to its senior management. Eventually,that is what will have to change.