Those in government who are constantly looking for revival plans for loss-making PSUs\u2014under various \u2018turnaround\u2019 specialists\u2014would do well to look at how Air India has fared after large parts of the airline industry stopped functioning due to IndiGo grounding flights because of lack of pilots and Jet Airways coming close to shutting down. In February 2018, according to a news report in The Times of India, IndiGo had a market share of 39.9%, followed by Jet at 16.8% and Air India at 13.2%; SpiceJet was fourth with a share of 12.4%. A year later, in February 2019, IndiGo\u2019s market share had climbed to 43.4%, SpiceJet rose from 4th position to 2nd with a 13.7% market share while Air India remained at the 3rd slot, but with a reduced market share of 12.8%; nearly 90% of the fall in Jet\u2019s market share, to 11.4%, was grabbed by IndiGo and SpiceJet. A similar story, not surprising given the various factors constraining PSUs that no government has been able to fix, applies to telecom PSUs like MTNL and BSNL; despite so many telecom players being forced to shut down, even before the fresh RJio onslaught, both PSUs continued to lose market share. ALSO READ: SpiceJet share price rises as much as 14% after higher February passenger traffic And this is despite the thousands of crores of taxpayer bailouts these PSUs continue to get in order to protect their bloated\/inefficient workforces. Worse, this access to free money has distorted the competitive environment and may even be responsible for the large losses made by private sector firms. Air India, as Bloomberg Opinon columnist David Fickling has pointed out, is a full-service carrier\u2014like Jet Airways\u2014but its ticket prices resemble those of a budget airline. Over the past few years, data from the Directorate General of Civil Aviation show that Jet\u2019s passenger yields are significantly higher than IndiGo\u2019s\u2014as they should since the latter is a low-cost airline\u2014but Air India\u2019s yields aren\u2019t very different. In 2017, for instance, Jet\u2019s yields were Rs 4.4 per revenue passenger kilometre (RPK) versus Rs 3.7 for IndiGo (18.9% higher) and Rs 3.9 for Air India (just 5.4% higher than IndiGo); in 2014, in fact, while Jet\u2019s yield was Rs 4.9 versus IndiGo\u2019s Rs 4.5, that for Air India was even lower at Rs 4.3. Had Air India not got the Rs 32,809 crore it got since FY10, it would have shut down, and with overall fares rising as a result, other airlines would have done better. ALSO READ: Modi govt exceeds disinvestment target for FY19 as receipts hit Rs 85,000 crore In this context, it is also important that bankers, like SBI, don\u2019t consider the proposal, doing the rounds for a while, to merge Air India and Jet and then sell the combined package to a willing buyer; with Etihad wanting to offload its Jet stake to SBI at a huge discount, and SBI asking Naresh Goyal to exit the airline, the temptation to do this will be large. Apart from the fact that the history of M&A is chequered globally, central to the idea of the merger is the government absorbing a lot more of Air India\u2019s debt. If more of the debt had to be absorbed, as this newspaper has been arguing, it would have made the Air India sale a lot more attractive, so why link it to a merger with Jet. Indeed, absorbing the rest of the debt, beyond what the government had agreed to at the time of the privatisation process, would have equalled just 3-4 years of Air India\u2019s future losses, so it would have been a win-win. Ideally, RBI should enforce its rules and ensure Jet goes to the NCLT if a solution is not found within the requisite time frame. If a combined Jet-Air India makes as much sense as is being made out, a potential buyer can get Jet at a discount in NCLT and then make a bid for Air India. Neither the banks, nor the government\u2014via the banks it owns\u2014should try its hand at this complex deal.