The Indian Government, which carries the financial burden of the airline is desperate to sell Air India and let it drop from the public tax-fed budget. However, as is so common in so many countries, airlines are seen as a matter of national pride, especially the flag carrier. This completely contaminates any sensible business approach to an airlines’ well being.
Indian MP’s are bothered by what their constituents might think if they allow a sell off. They also know that thousands of people will lose their jobs, because the airline, like so much that is state-owned, is basically inefficient, over manned and over burdened with costs a normal airline would see as totally unsustainable.
The airline runs up massive debt, but now rather than sell the airline, and let it dispose of its debt commercially, parliament wants to let it take five years to do it slowly, at tax payers expense, just to preserve a few jobs for another few years. Indeed they’re going further than that. Parliament gets more than a few perks, and Air India – flights especially may well form part of that currency. So now they’re looking at not selling it at all but finding a way to keep it state-owned but, perhaps a little more independent.
The fact remains that as a state-owned entity it hasn’t turned a profit in over a decade. The Government need to get rid of it and set it free to make its own way, but self-serving parliamentarians are not inclined to let their influence over it go, or face the possibility of sacked employees in the process.
What isn’t being seen is the fact that India’s airline market is massive and growing, and many of those sacked in the event could well find jobs with other airlines as they expand all over India. Change is painful, but Air India will just become even more lethargic and less competitive if its forced to stay under government control.