That the minister of civil aviation is weighing the option of recruiting top private sector talent to help resurrect Air India is unexceptionable. It conforms to what is perhaps a welcome new trend to attract top corporate talent into government. The problem with Air India, of course, is that many of its problems arise because it is in government control, rather than autonomous of it. Even the best corporate sector talent will struggle to resurrect an Air India, which is burdened with many of the institutional constraints that come with being a PSU that directly reports to a bureaucracy and minister. Air India?s most fundamental problem?overstaffing?is unlikely to be solved as long it?s under the wing of a government that will not allow staff restructuring. Without the freedom to operate the airline as they would a private sector firm, Messrs Tata, Murthy and Ramadorai or any other set of corporate leaders are unlikely to turn around the fortunes of India?s national carrier.
In any case, there is still considerable confusion about what role these gentlemen are likely to play. The initial suggestion was that they may be inducted onto the board of Air India, with perhaps Ratan Tata taking on the role of chairman. Now, it seems that this group will form an advisory board rather than the board proper. They may yet be given the task of choosing new senior management. But again, it isn?t clear if just a COO will be hired from outside or whether a CEO will actually be recruited. If the CEO is still an insider?usually a career IAS officer without any specific training in corporate management? not much is likely to change. If Praful Patel is really serious about turning Air India around, he needs to find people of eminence from the corporate sector to join Air India?s board proper. He also needs to find people who will have sufficient time to dedicate to Air India?s very complex problems. Ratan Tata, an excellent choice though he would be, has plenty of problems to tackle in his own business group, and may not be able to find the kind of time that is needed. At the moment, the civil aviation ministry?s moves seem to be cloaked in tokenism, hardly a patch on the government?s aggressive and efficient handling of the Satyam fiasco. The government would do well to hold back any cash bailout to Air India until these issues are resolved.Remember, Rs 5,000 crore that Air India may get 1,000 km of national highways.
