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Air India not to be privatised, turn around plan soon: Govt

Air India not to be privatised, turn around plan soon: Govt

Ruling out any privatisation of the state-owned carrier, the government promises administrative and monetary steps to turn it around. It also assures of a action against officers responsible for the losses.

Crying foul, Opposition on Friday alleged in Lok Sabha that there was a deliberate design to make state carrier Air India bankrupt in order to privatise it, prompting the government to rule out privatisation and promise administrative and monetary steps to turn it around.

CPI and BJP members slammed the government saying it was doing nothing to help the bleeding 'Maharaja', which used to be a symbol of prestige, and is now on death bed.

Specifically targeting Air India's Chairman and Managing Director for the mess and attacking the Prime Minister's Office for his appointment, they demanded an overhaul of the entire management followed by full financial infusion, contending that the recent Rs 1,200 crore package was not at all enough.

Responding to the members' concern expressed through a calling attention motion, Minister of State for Parliamentary Affairs V Narayanasamy ruled out any move to privatise Air India and said the government would provide "all possible support" to strengthen the carrier.

Blog: The Maharaja's Advocate

Listing various steps being contemplated to turn around the airline, he said there will be a complete "rationalisation" of manpower.

"If government found any officer responsible for the losses, government will take action. Government has an open mind, ... government will definitely consider that ... action against officers responsible," said Narayanasamy, responding on behalf of Civil Aviation Minister Vayalar Ravi who is suffering from a throat infection.

Dissatisfied with the reply, the opposition members staged a walkout.

Noting that a Group of Ministers (GoM) was looking into the problems of Air India, Narayanasamy said a turnaround plan with financial support would be unveiled soon.

"The policy of the government is to strengthen Air India.

Whatever possible support is required, will be given," the minister said.

Contending that Air India had suffered due to declining passenger load and competition from private airlines after 'Open Skies' Policy in 2003 during NDA rule, he said the state carrier was facing a debt of over Rs 44,000 crore and a scheme is being worked out to address it.

Measures under consideration include rationalisation of routes to cut losses, rescheduling of aircraft, complete rationalisation of manpower, redeployment of staff, reduction in contractual appointments, aligning all operational and technical agreements between management and staff to reflect the present market conditions.

On issues pending from the merger, especially concerning human resources, the Minister said a Committee headed by Justice Dharmadhikari was soon going to submit its recommendations to the government.

While the airline Board was being reconstituted and remaining posts of functional directors being filled soon, he said the Ministry has also tightened its oversight mechanism.

The Opposition members, including Gurudas Dasgupta (CPI), Murli Manohar Joshi and Shahnawaz Hussain (both BJP), asked the government to "come clean" on how large aircraft orders were given, why the losses mounted heavily after the merger two state-run airlines and "giving away" of profitable routes to private and foreign airlines.

Responding to members' questions over the merger, Narayanasamy said the decision had been approved by the Parliament. He also rejected charges that AI's profitable routes had been given up under any influence, saying routes are decided on the basis of international and domestic norms.

The Minister also sought to counter the opposition charge that Air India planes were made to under-perform in terms of average hours on a daily basis.

The Opposition members wanted to know why salary payments to the airline's 41,000 employees were being delayed on a regular basis.

"The main issue is not just the (delays in) salary payments, but the manner in which the national carrier is being dismantled by those in power and those who are in charge", Dasgupta said.

Asking how Air India declined "so fast in just four years" and went on an "expensive shopping spree" for aircraft, he alleged that "this exposes the nexus between politicians, bureaucrats and unidentified powers who move in the corridors of government".

"More the purchase, greater the booty. That is the popular perception", Dasgupta said.

BJP leader M M Joshi asked how the airline could place orders worth Rs 35,000 crore for 68 aircraft when its turnover was merely Rs 7,000 crore. He also questioned the role of the Finance Ministry in this, as also that of the PMO and the Civil Aviation Ministry.

Quoting official records, the two leaders raised questions on the process of selection of the present CMD, asking how he had become eligible in 2009 after being rejected by the selection committee the previous year. "The appointment is dubious, the performance is dubious and the result is dubious," Dasgupta said.

Former Civil Aviation Minister Shahnawaz Hussain said the airline was in profits before the merger and even after the 9/11 crisis when the global airline industry went into losses.

Referring to the losses made post-merger, he said "like in cricket matches, there is a big match fixing in the merger of Indian Airlines and Air India. ....I also suspect such match-fixing in the strikes in the airline."

"Take stern action against all those found guilty of ruining Air India. Not just the CMD but everyone", he said.

Another BJP member Bhola Singh also raised similar questions and equated Air India with the historic character Anarkali.

"Akbar had told Anarkali that I will neither let you live, nor let die. That is exactly the situation facing Air India," Singh said creating laughter.

Ramesh Bais (BJP) said while Air India stopped flights on several routes, including Delhi-Raipur sector, on grounds of lack of passenger demand, the private airlines which started operating more flights on that sector were flying with full load.

He also said there was a "conspiracy" to privatise the national carrier and demanded that no such move should be made.

--With PTI inputs