A crisis,still

It is the government,after all,that has made AI the exemplar of chronic financial irresponsibility by bestowing on it limitless largesse and providing it with a sovereign debt guarantee,while the carrier has reiterated its wasteful ways,for instance,offering free or subsidised travel for extended families of its staff. The latest package of Rs 30,000 crore had come with the attached caveats of 90 per cent on-time performance,73 per cent passenger load and improved yields. By all accounts,that was a tall order for a carrier that met total cost on only two of its 175 domestic and international routes in Q1 and Q2 last year but did not hesitate to give performance-linked incentives to its perpetually underperforming employees. This strike alone has caused AI a revenue loss of approximately Rs 600 crore. As adverse circumstances have inflicted a loss of Rs 10,000 crore on the civil aviation sector for FY 2011-12,the civil aviation ministry can ill afford to ignore the troubles of the larger industry while it fusses over a strike irrelevant to solving AIs problems. AI must be fixed,if not abandoned,to help the civil aviation sector.

The government had decided to take away AIs monopoly over bilaterals and right of first refusal,but there must be movement on allowing more efficient private Indian carriers to increase their overseas operations. Above all,whats needed is genuine reform such as allowing foreign carriers to hold equity in Indian airlines. This would,for instance,help struggling Indian carriers to raise capital. The government had taken the right call on not bailing out Kingfisher. It should have asked AI to fend for itself long ago. Continuing to suffer the tantrums of AIs well-compensated and troublesome pilots just throws good money after bad.

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