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Why the Indian government will not let go control of Air India

Over the last month, national carrier Air India has been pilloried in the press across the the world. Stalwarts like the domestic Indian Express and the international New York Times, have exposed the rot and have even called for the closure of the airline.

Exposes into the conflicts between management, board of directors, advisors, bureaucrats, politicians, labour abound, and charges from basic mis-management to nepotism, questionable actions to outright corruption have come to light.

Despite calls from across the nation for the government to let go control of Air India, in my humble opinion this is just not going to happen any time soon.

Many a friend has written to me in complete bewilderment on the horrific details emerging in the media about Air India and their reflection on the logic on the decision making, or rather lack of it.

“It is absurd how can an airline be allowed to spend twice as much as its revenue, not profit?!?!” asked an fellow aviation blogger in utter confusion.

Air India is not really an airline. Under the guise of a “national carrier” the Air India has been systemetically pillaged and converted into a NetJets for the Government of India. An “airline” funded by the tax-payer, but run for the benefit of the modern day aristocracy — politicians, ministry bureaucrats, the management, and the labour leaders.

Politicians make absurd demands of the airline from ridiculous routes to hiring cronies, all meant to inflate their local standing with their vote-banks regardless on economic impact on Air India.

Instead of seasoned airline professionals with years of operating experience, the airline management comprises of bureaucrats from the Indian Administrative Service (IAS). While the service has excellent general administrators, running an industry, and more so an airline, is a specialised field. Even the Board of Directors is essentially filled with government officers.

Though the IAS is supposed to be independent, over the years, the service has become beholden to the politicians for good postings. Crossing the wishes of a minister is career suicide for a bureaucrat. Could this be a reason for some of the rather illogical decisions or quiet acceptance of politicians dictats by the management?

If the politicians aren’t enough, the airline is constantly troubled by bureaucrats from the aviation fraternity, and other ministries and departments, with varieties of requests, most of them self serving. As stated in the in New York Times article

“I feel like a woman with 1,000 husbands,” one male Air India executive complained, referring to the constant demands from government officials.

Add to all the political and bureaucratic aristocracy, the labour aristocracy. Union leaders derive power from the entrenched and over-bloated work force of Air India, who know a government job is for life. In India a government employee is never terminated, merely transferred. The labour leaders trade their power in an symbiotic relationship with the political parties and collectively subvert any logical business decision.

As much as I am in sympathy with the pilots of the erstwhile Indian Airlines who recently went on strike, I was intrigued. There is a severe scarcity of qualified pilots in India, especially Airbus A320 family aircraft commanders, and the private airlines are desperate. Yet, the Air India A320 pilots preferred to strike rather than resigning their position and taking up employment with other carriers. Do they have it too good already?

The end result is this grotesque and absurd condition Air India is in. These aristocrats control a Rs. 45,000 Cr ($10 billion) enterprise with absolutely no accountability to the tax-payers of India whose money is being wasted to run, what is essentially, a private airline for the benefit of these aristocrats.

Why is it so difficult for the Indian tax payer to observe that the government mandates quarterly disclosures of FULL financial details if a “private” company takes even a small part of funds from investors and is listed on the stock exchange, while quietly accepting next to zero disclosure from almost all “public sector” (100% public tax payer funded, 100% government run, 0% accountability) companies?

Is so difficult for the Indian tax-payer to realise that the accumulated losses of Air India till date will feed every hungry Indian for a year?

Share your thoughts via a comment.

About Devesh Agarwal

A electronics and automotive product management, marketing and branding expert, he was awarded a silver medal at the Lockheed Martin innovation competition 2010. He is ranked 6th on Mashable's list of aviation pros on Twitter and in addition to Bangalore Aviation, he has contributed to leading publications like Aviation Week, Conde Nast Traveller India, The Economic Times, and The Mint (a Wall Street Journal content partner). He remains a frequent flier and shares the good, the bad, and the ugly about the Indian aviation industry without fear or favour.

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