NO TAKERS

Source: The Hitavada      Date: 02 Jun 2018 11:34:48

THAT there were no takers for the Government’s plan of disinvestment of Air India even after an extension of deadline for submission of ‘Expression of Intent' (EoI), comes as a reality check on what the Government has done of many a star companies in public sector. Let alone its management troubles, Air India has often been regarded as a good airline for air travel internally or internationally. Yet, no bids have come for disinvestment plan. This should make the Government to sit up and take notice.

That no investors showed interest in Air India speaks of how the Government has messed up with the overall management of the national airline over the years. So pathetic was the Government’s approach to management of Air India that those who knew how the airline functioned under the founders -- the Tatas -- often felt that the Government should never have taken over the company. For, right from the start, no matter the frills and flares of bloated egos of Government leaders, the airline never really flourished under the Governmental control. It kept running in huge losses whose cumulative values rose to stunning numbers.

With the advent of private sector in civil aviation in the country, Air India started suffering more since the people in the Government never allowed the airline to work professionally. Much to the contrary, it also kept offering all sorts of favours to private airlines including good routes and better terms and conditions on money matters. Air India hardly got any such support and concessions. As a result, it kept sliding downhill and never recovered.

During those days, many experts insisted that the Government allowed Air India to work fully professionally without any political interference. All these appeals fell on deaf years, with Aviation Ministers treating the company as their fiefdom. They also made huge investments in acquisition of aircraft etc, but did not allow professional freedom to the Air India management. As a result, despite all the physical facilities being made available, the airline never flourished in a real sense. This approach led the airline into perpetual losses.

All theses details must have weighed heavily on the minds of potential investors. They must have asked themselves one simple question: Why should they invest in Air India that has such huge losses? For, any investor would have to take care of losses as well, though with a few possible concessions. Naturally, when a company is on a downhill slide, investing in it and reviving it would mean a massive requirement of funds on a continued basis for long years. Perhaps, this is the reason why no taker came up despite extension of deadline for submission of bids for Air India.

Of course, eventually, some line of action would be worked out by the Government to push Air India disinvestment. But if that does not happen in a reasonable manner, the Government might have to change its decision and continue to control the airline for some more time. If that happens to be the fate of Air India, then the Government will have to return to the basics of management of such a huge enterprise that has been in a perpetual loss. And that would mean one most critical thing -- that the Government will have to ensure that there is no political interference in the management and that the airline is allowed to work fully on a professional basis. That will not be an easy ball-game, however. For, one of the worst bans of public sector companies in the country is political interference. The Government will have to allow not just Air India but also to other public enterprises enough professional freedom so that they compete on a level-playing field.