Column : How Maharaja lost his sense of Boeing

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: While the Budget has not announced any relief for Air India, the civil aviation minister has announced a top-level revamp to cure it of all its ills. He hopes that by bringing in industry icons like Ratan Tata, Narayana Murthy and inventor- strategist Sam Pritoda into the Air India board or by creating an advisory board, it will be resurrected.

Air India has been grounded because of inaction and thoughtless action in the recent past, like the merger of two loss-making public sector airlines over two years ago without a proper follow-up, and the drowning of it in deep credit crunch by purchasing a huge number of aircraft without looking at the financial capability of the organisation. The legacy airline has also got meshed into a number of complicated and counterproductive union agreements with their seven odd unions over the years from which they have not been able to extricate themselves.

In 2000, a serious proposal to divest the airline to a strategic partner was considered due to its poor performance, and efforts to achieve it nearly succeeded. The selection of the Tata and Singapore Airlines joint proposal as a strategic partner was also reached but at the last minute, Singapore Airlines backed out and before the Tatas were able to locate another airline as a strategic partner, 9/11 took place and all airlines of the world went into a tailspin. It has been nine years since and the airline has not improved in its performance.

We are currently in a similar scenario when airlines around the world are in deep distress and, therefore, strategic divestment at this stage may not be possible. Further, due to liberal bilateral agreements given in the recent past, the attractiveness of Air India has further declined.