India's White Elephant

Air India has been enjoying the limelight almost on a daily basis with all the leading newspapers in India. But it is getting popularity for all the wrong reasons. According to sources, Air India has a cumulative loss and a massive debt burden collectively totaling upto 67000 crores!! Well, seriously, I don't even want to know how many zeroes are there in this figure. But one thing that I know is that it is roughly 1% of India's 1.3 trillion USD GDP. People do joke that the airline makes less losses on a day it is not functioning (due to strikes etc) than when it is operational!!

Jokes apart, I believe that the culture at Air India is still similar to that of the bygone days babus regime where the employees did not pay any heed to what is going on around them - the typical mentality of a PSU back in those days. There seems to be no accountability at Air India, and absence of skilled employees and/or presence of red tapism could be the reasons why the losses of Air India are always headed North. I believe Lalu Prasad Yadav should be made the Aviation minister, based on the fact that he was the only Railways minister under whose regime Indian Railways posted profits ever.

Why does the Government always have to infuse equity capital into Air India, when it knows that the equity gets eroded as soon as it is infused!! Why not declare Air India a sick company, like it has been doing with many others and divest its stakes. Let the Government hold the majority stake and invite the private players to take a minority stake - which could possibly lead to Air India's turn around. Imagine where would have the Air India been had it not been taken over from J.R.D Tata in 1940s. It would probably have been the most profitable air line by now!!

I strongly believe that the Government should manage the various ministries just like a corporate, with the payout of the minister dependent on the performance of the ministry. It is the only sustainable way going forward to get in more accountability into these portfolios.

Air India should set a target for itself to make it comparable to the Navratnas, where people from all walks of life want to go and be a part of. It should try hiring good people from the corporate world and from good B schools and devise a turn around strategy. Hoping to see Air India in green soon.