Opinion - Editorials

Letting the airlines fly

THE CABINET COMMITTEE on Disinvestment had no choice in deciding to take the two airlines — Air India and Indian Airlines — off the disinvestment list. The pendulum has swung the other way now, with the Centre bowing to the wishes of the Union Civil Aviation Ministry and letting the two national carriers off the hook. For too long, this dithering and scouting for prospective strategic partners had gone on and, in the process, the two airlines suffered serious setbacks in a highly competitive environment. It was a vicious cycle — the airlines needed to be healthy, competitive and viable if a strategic partner was to take interest in bidding for them; to be viable or even profitable, the two airlines badly needed to embark on a fleet acquisition programme; and if the Centre was going to invest such huge sums in aircraft acquisition, why should it sell off the airlines? In the end, perhaps just to enable Air India (AI) and Indian Airlines (IA) to finalise their expansion plans, the Cabinet Committee has agreed to take them off the chopping block. But this by itself will not take the airlines very far. Apart from processing their fleet acquisition programmes, the Centre, particularly the Civil Aviation Ministry, has to empower and enable the two national carriers to fly out on their own.

Now that the Cabinet Committee has taken this decision, the two airlines are expected to expedite the process of aircraft acquisition. A Pre-Public Investment Board meeting, probably as early as next week, is expected to clear the proposal and set the ball rolling. The needs of AI and IA will differ and the basic question will be: should they go in for the latest variants of what they have or switch over to better options? There are advantages and disadvantages in both these options and, obviously, the more viable and less costly investment decision will have to be taken. But aircraft acquisition is just one avenue to make them competitive. The imperative need of the hour is to make the two airlines `lean and mean', efficient and productive. The various employees unions, which have been protesting all these years against privatisation or disinvestment, must now pull up their socks and demonstrate their efficiency. Productivity norms will have to be introduced and the aircraft-employee ratio made effective. Pampering of any section of employees must be stopped and all forms of governmental and political interference must end. The special favours being doled out to the private airlines or operators have to be curtailed and a level playing field ensured for all airlines, including the national carriers.

There has to be a serious attempt to professionalise the managements of AI and IA. They cannot afford to be appendages of the Civil Aviation Ministry and the practice of appointing Joint Secretaries as Managing Directors must be given up. Unnecessary appointments will have to be reviewed at all levels. The Government cannot continue to burden the national carriers with the so-called `social responsibilities'. The two airlines should not be competing with each other on key, revenue-earning routes and a real synergy between the national carriers will have to be worked out so that they can take on the competition in both the domestic and international sectors. A thorough review of their operations, selection of viable and profitable routes, cutting down on avoidable expenditure and overheads and a qualitative improvement in the service to passengers and customers hold the key to the success of both the airlines. Having taken a decision not to disinvest in the airlines, the Centre now has the responsibility to make them autonomous, efficient and profitable undertakings. The best way to achieve that will be to professionalise the managements and let them take the right, commercial decisions. Hopefully, there will be no further talk of disinvestment in the airlines, at least in the foreseeable future.

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