by Rajiv Kumar
The
Air India saga continues to unfold in its dismal, depressing and yet
sadly predictable manner. It is not the first time that this tragic
farce is being played
out and certainly will not be the last if Air India continues as a
public sector enterprise (PSE). Similar to a two star rated Bollywood
movie, the main players, side actors, and outsiders (in this case,
however, they also foot the bill as taxpayers) know the script by heart.
The
strike has been called because the management will not pay heed to the
employees' demands otherwise. Now both sides will toughen their
respective stands,
simply to improve their bargaining positions in the negotiations that
both of them know will inevitably follow. More employees will join the
striking pilots; the management will persist in turning the media
against the well heeled pilots and in public appeals to save taxpayers'
money.
Justification
These
appeals have zero credibility as the taxpayers have been sufficiently
educated by the CAG, Anna Hazare and others on flagrant squandering and
swindling of
the public exchequer by those charged with the direct responsibility of
safeguarding it. The issue is bound to be escalated to the higher
authorities who will then appeal to both sides to protect national
interest and prestige; minimise passengers' plight, and end the
sufferings of pilots' families and avoid further revenue loss. Some kind
of compromise will be worked out but only until the next major dispute
that will again precipitate a strike because in the government these
days we practise management by crisis.
The
answer to the simple question as to who benefits from this ongoing mess
is a rather straightforward one. Continuing with Air India as a public
sector
enterprise serves the entrenched vested interest of no more than a
hundred thousand persons, including the employees in a country of 1.2
billion!! Its continuation as a PSE has no strategic implications and
not even in the wildest stretch of imagination does it serve the
interests of either the poor or the so called aam aadmi. There is though
one patently spurious argument in support of its continued status as a
PSE. This is about connecting far flung and sparsely populated regions
of our country and for serving the annual air travel needs of religious
pilgrims. This argument is as spurious as
saying that villages can be connected to the telecom network only by
BSNL and only public sector road transport services can connect rural
destinations. Both these arguments have been proved totally false in
real life experience. And even the slightest bit of honest thinking will
reveal to all concerned that public service objectives can be far more
efficiently achieved by a judicious and well regulated operation of
publicprivate partnership, with the government partly footing the bill
as in viability gap funding.
Now
that even the Minister in charge of Air India has said in a television
interview that the government is not equipped to manage a service
industry, is it not
high time that an entity which neither serves public interest nor earns
revenues for the government, is immediately and comprehensively handed
over to the highest private sector bidder whether domestic or foreign
and preferably hailing from the airlines sector? All rational persons I
am sure will back a privatisation plan for Air India. Even in private
hands it will remain an Indian company and if its performance does
improve, as it will most likely do, under private ownership, we will all
be proud of it as we were of the Maharaja and are of other Indian
airlines which are now competing
successfully with the best in the world.
Vested interests
The
only possible losers will be a handful of those persons who get to
travel first class on public account and can have seats reserved for
themselves even if at
times it means unnecessary waste of a high paying seat.
We
all know precisely who these folks are and I am sure that we all agree
that this cannot be sufficient reason for continuing with Air India as a
PSE. The short
but critical point is that Air India should be privatised as soon as
possible. This should be done even if it means having to pay a strategic
investor perhaps by offering them the lucrative bilateral routes
currently owned by Air India under the IATA's global oligopolistic
arrangement, which itself is a bit of an anachronism.
The
global civil aviation industry is a tough place with cut throat
competition and owners with deep pockets and airlines with massive
economies of scale. They are
out to grab greater market share.
Industry
In
this viciously competitive environment, made more difficult by the
industry's long cycles of troughs and peaks, only the best can hope to
survive. Air
India, as a PSE, with its senior management being made up of civil
servants, who are perpetually uncertain of both their actual authority
and their tenure, is badly hamstrung to face this competition. We need
advanced management and HR practices that will motivate the staff, give
them ownership in the company and a sense of pride and fulfilment in
achieving success.
We
are too far away from that paradigm to even contemplate getting there.
So any attempt to find a 'solution' or fix the problem within the
present
framework is bound to fail as happened in a previous phase when the Air
India's Board with leading lights from the corporate world tried to
devise a plan to revive it. There is simply no alternative to
privatising Air India. The longer we refuse to bite the bullet, the
greater will be the damage to national pride, the public exchequer and
the Indian civil aviation industry. For India's sake let's act
decisively now.
_______________________________
- The writer is Secretary General of FICCI. The views are strictly personal.
by Rajiv Kumar
The
Air India saga continues to unfold in its dismal, depressing and yet
sadly predictable manner. It is not the first time that this tragic
farce is being played
out and certainly will not be the last if Air India continues as a
public sector enterprise (PSE). Similar to a two star rated Bollywood
movie, the main players, side actors, and outsiders (in this case,
however, they also foot the bill as taxpayers) know the script by heart.
The
strike has been called because the management will not pay heed to the
employees' demands otherwise. Now both sides will toughen their
respective stands,
simply to improve their bargaining positions in the negotiations that
both of them know will inevitably follow. More employees will join the
striking pilots; the management will persist in turning the media
against the well heeled pilots and in public appeals to save taxpayers'
money.
Justification
These
appeals have zero credibility as the taxpayers have been sufficiently
educated by the CAG, Anna Hazare and others on flagrant squandering and
swindling of
the public exchequer by those charged with the direct responsibility of
safeguarding it. The issue is bound to be escalated to the higher
authorities who will then appeal to both sides to protect national
interest and prestige; minimise passengers' plight, and end the
sufferings of pilots' families and avoid further revenue loss. Some kind
of compromise will be worked out but only until the next major dispute
that will again precipitate a strike because in the government these
days we practise management by crisis.
The
answer to the simple question as to who benefits from this ongoing mess
is a rather straightforward one. Continuing with Air India as a public
sector
enterprise serves the entrenched vested interest of no more than a
hundred thousand persons, including the employees in a country of 1.2
billion!! Its continuation as a PSE has no strategic implications and
not even in the wildest stretch of imagination does it serve the
interests of either the poor or the so called aam aadmi. There is though
one patently spurious argument in support of its continued status as a
PSE. This is about connecting far flung and sparsely populated regions
of our country and for serving the annual air travel needs of religious
pilgrims. This argument is as spurious as
saying that villages can be connected to the telecom network only by
BSNL and only public sector road transport services can connect rural
destinations. Both these arguments have been proved totally false in
real life experience. And even the slightest bit of honest thinking will
reveal to all concerned that public service objectives can be far more
efficiently achieved by a judicious and well regulated operation of
publicprivate partnership, with the government partly footing the bill
as in viability gap funding.
Now
that even the Minister in charge of Air India has said in a television
interview that the government is not equipped to manage a service
industry, is it not
high time that an entity which neither serves public interest nor earns
revenues for the government, is immediately and comprehensively handed
over to the highest private sector bidder whether domestic or foreign
and preferably hailing from the airlines sector? All rational persons I
am sure will back a privatisation plan for Air India. Even in private
hands it will remain an Indian company and if its performance does
improve, as it will most likely do, under private ownership, we will all
be proud of it as we were of the Maharaja and are of other Indian
airlines which are now competing
successfully with the best in the world.
Vested interests
The
only possible losers will be a handful of those persons who get to
travel first class on public account and can have seats reserved for
themselves even if at
times it means unnecessary waste of a high paying seat.
We
all know precisely who these folks are and I am sure that we all agree
that this cannot be sufficient reason for continuing with Air India as a
PSE. The short
but critical point is that Air India should be privatised as soon as
possible. This should be done even if it means having to pay a strategic
investor perhaps by offering them the lucrative bilateral routes
currently owned by Air India under the IATA's global oligopolistic
arrangement, which itself is a bit of an anachronism.
The
global civil aviation industry is a tough place with cut throat
competition and owners with deep pockets and airlines with massive
economies of scale. They are
out to grab greater market share.
Industry
In
this viciously competitive environment, made more difficult by the
industry's long cycles of troughs and peaks, only the best can hope to
survive. Air
India, as a PSE, with its senior management being made up of civil
servants, who are perpetually uncertain of both their actual authority
and their tenure, is badly hamstrung to face this competition. We need
advanced management and HR practices that will motivate the staff, give
them ownership in the company and a sense of pride and fulfilment in
achieving success.
We
are too far away from that paradigm to even contemplate getting there.
So any attempt to find a 'solution' or fix the problem within the
present
framework is bound to fail as happened in a previous phase when the Air
India's Board with leading lights from the corporate world tried to
devise a plan to revive it. There is simply no alternative to
privatising Air India. The longer we refuse to bite the bullet, the
greater will be the damage to national pride, the public exchequer and
the Indian civil aviation industry. For India's sake let's act
decisively now.
_______________________________
- The writer is Secretary General of FICCI. The views are strictly personal.
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