Forever waiting in the wings

A-I’s CEO MichaelMascarenhas is indeed optimistic and expects governmental approval pretty soon. Which is a typical a case of hope triumphing over experience. The trouble is that his counterpart at the Virgin Atlantic is quite unlike him. He is a shrewd businessman used to quick decisions and certainly unused to the kind of dithering our bureaucrats revel in. The latter, however, have a credible excuse should they decide to delay the deal. The long awaited civil aviation policy is being given the finishing touches. So why fret about a deal whose ramifications are as yet unclear?Interestingly, the deal is being rushed through even as the Civil Aviation Ministry is seen pushing the case for part privatisation of the airline.

What if Air-India’s new partner objects to the deal under which the Virgin Atlantic will operate three services in a week on the plum London-Delhi/Mumbai route? Presently, Air-India is unable to make full use of its traffic rights on the sector because of capacity constraints and the sheer incapacity tomarket its product. Its new partner, whoever it is, will have both the capacity and the market savvy to cash in on a booming market and hence will not like to share the spoils with anyone. In which case, what will be the fate of A-I’s deal with Virgin Atlantic? Can A-I then jettison the deal without loss of face?

But, in fairness, is not A-I management more sinned against than sinning? A-I is doubtless sick, but not terminally. Recovery is still possible. There is a tested recipe for recovery ruthless cost-cutting, downsizing, route trimming and fleet modernising. British Airways tried this to great success in the early Eighties. Air France used it to great effect in the early Nineties. The latest success story is that of Continental Airlines of the US. In less than two years, as chronicled by its saviour Gordon Bethune in his book From Worst to First, an ailing Continental became America’s most efficient and profitable carrier.

Speaking at a seminar organised by CII in New Delhi recently, the Secretaryto the Civil Aviation Ministry went on record as saying that A-I’s foreign partner would be given total managerial control and freedom despite its minority participation. This indeed is curious. If a foreigner can be given such total freedom with a minuscule financial involvement, why not the same privilege be given to the present management, at least on a trial basis?A-I’s past record will prove this point. Till the mid-Eighties, A-I had been a success story that qualified it for being a showpiece of public sector. One major reason was that its management enjoyed considerable operational freedom. It fell on bad days the moment the decision-making centre was shifted to the ministry.

In some ways, the turnaround of Indian Airlines is largely due to the operational freedom given it in recent times. An extension of the same policy will go a long way in helping its international counterpart recover some of its lost space in the sky. Even the vexatious issue of raising fresh finance will pose no problem, if themanagement is allowed to sell the three hotels it runs.

The writer is a former Resident Editor of The Indian Express, Kerala editions