26 June, 2009

No bailout for Air India

Air India is lobbying furiously for a massive bailout. Most airlines around the world are sick; so its no surprise that Air India, which is a particularly badly run airline, is in deep trouble. The mood these days is in favour of bailouts of whoever shouts loudest or scares the most. But look at what Air India is reported to be asking

- They want Rs 15,000 crores ($ 3bn plus)
- They want foreign airlines’ “sixth freedom rights” – the right to operate to multiple destinations in India to be reviewed (read stopped)
- They want capacities of foreign airlines to be frozen to give Air India “breathing space”
- They want to stop private Indian airlines from operating to areas like the Gulf so that Air India can “gain”.

All in the name of “public interest”.

Hello ! The cheek to even make such a demand. Air India – do you think the tax payer and the poor flying customer are idiots ? You guys just don’t get it – you are in business to serve a customer, not to screw him.

Just look at yourself in the mirror. You are a bloated, inefficient, organization. Granted its not all your doing – politicians and bureaucrats have long pillaged you. Unions have ensured that you cannot succeed. But the fact is that you are an airline no one wants to fly in. Millions of Indians travel abroad, many for the first time. They would love to travel in a familiar Indian environment. They don’t particularly like foreign airlines, many of whom treat Indians condescendingly. But it should tell you something that no one would willingly choose you over even Air France.

The government should not succumb to the temptation of playing Sir Galahad to an ugly crone. Take Air India into bankruptcy. Force it to restructure and come out leaner and somewhat resembling an airline rather than the employment agency it is now. Make it sell its bits and pieces. If an icon of America, General Motors, can go through this, so can Air India, which is no icon. If Air India can do all these things, help it along. If it can’t, or won’t, shut it down.

I am a consumer and a taxpayer. I am not prepared to do charity for Air India.

JRD Tata must be turning in his grave.

15 comments:

thethoughtfultrain said...

Ramesh, I hope you have offers of writing a business column coming your way. And please do accept them ... You report and analyze business news in a way that business-knowledge-challenged people can relate to so easily!!

Hang said...

Ramesh, well said. Air India is making an absurd demand asking not only for taxpayers' money but also a high level protectionism that only benefits itself.

Many airline companies are in trouble. British Airways asks employees to work for free or take no-pay leaves. China Eastern Airline is struggling as well. This industry did not look good even before the financial crisis. I assume some airlines should go bankrupt instead of asking for a bailout.

Ramesh said...

@thoughtful train - you are so kind. I am honoured !

@Hang - Yeah - most airlines are in deep trouble. The big three in China - Air China, China Eastern and China Southern, all seem to have difficulties. Its a global crisis for this industry

A journey called Life said...

first up i totally agree to what ash has to say in the her comment
secondly i feel u r absolutely right when u say that the govt should not given to ridiculous demands of a lousy airline..may be (high hopes) that this will then nudge the airlines on the track to good health

Ramesh said...

@AJCL - Thanks for the endorsement of Ash's high compliment. I am on cloud nine today !
This time it does look as if the government means business and they won't let Air India off the hook.

kiwibloie said...

Air India! I have done two international sectors on them and made up my mind never again... The best course of action would be for this airline to die a natural death. We are talking of 30,000 employees who have made enough and more money for their life times (Had a friend who briefly worked with them as a purser - half the booze on galleys from the international routes find a way into the black market!) The last thing I want is my tax money being spent on a bunch of #$^&*. Not a chance. Nice analysis.

Ramesh said...

@kiwi - I can perfectly understand your sentiments. Coming from a million mile traveller, this is a damning criticism indeed. I don't think they'll let it die, but atleast shrink it into a mouse rather than let it be the dinosaur it is.

rads said...

I've travelled by Air India once and no wonder the plane was almost empty. The service really sucks. I hope too that the govt. does not succumb to their demands; in fact if they have their own, so do the customers, and if the govt. thinks that junta is imp then they will make them improve their service or simply ask them to shutdown. Such organizations like Air India should never be given a second chance and look at their guts to make such demands, unbelievable!

le embrouille blogueur said...

I third what AJCL has seconded ....it is amazing how you break down the report for the non business folks to understand.

Satish said...

One of the reasons for other airlines such as Jet or Kingfisher getting so much market share In India is the quality of the service, efficiency and the innovations (of course the air hostesses count too). I do not recollect the last time I flew by Air India or Indian Airlines. Such a shame given that it was the country's biggest airlines once upon a time. However agree with the others comments here that it should just go into oblivion rather than sink further money down an open drain. Its like a cancerous leg which should be cut off rather than spread infection to other parts of the body. And for the people there who have been part of unions and who have resisted change guess this was called upon themselves. I do would not want my hard earned money (from which tax is deducted) to be used for such a cause.

Ramesh said...

@rads - Its amazing how unform everybody's experience has been travelling with Air India.

@blogueur - I am honoured, coming from the seasoned pro that you are

@Satish - There's almost unanimity in view here, and yet the unions will have their way, I'm afraid. In our country, the vociferous minority always wins against the silent majority. It just doesn't pay to remain silent.

Sabareesan said...

Political establishments do not run as commercial entities, therefore if employee union at GM had a strong say and were taken care, I can see that the same will happen here also and may be multiple times as we seem to be very tolerant lot.

Ramesh said...

@Sabareesan - Thanks for visiting and your comment. Of course, there will be political decisions made, but you and I as a tax payer who's funding all this, must have a say and we should say it loud.

jesus said...

I recently came accross your blog and have been reading along. I thought I would leave my first comment. I dont know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.


Sara

http://smallbusinessgrant.info

Ramesh said...

Thanks Sara for visiting and your kind comment.