National failure

Maybe the Trinamool Congresss theatrics did the trick. The partys MPs marched around the Lok Sabha waving placards assuring us Air India employees were starving. Reportedly,this led to a jittery government demanding the return of Air Indias chairman from a business meeting with insurers in Europe,to partly clear some of its outstanding dues to its employees. The prime minister,meanwhile,told Lok Sabha that everyone would get their money; the cabinet,quick as a flash,cleared an additional Rs 1,200 crore to Indias money-sink of a national carrier; and now,the airline has enough money to meet operational expenses for a couple of months. Naturally,this doesnt mean there is an improved chance of a turnaround in the companys fortunes; its estimated pile-up of losses is still Rs 20,000 crore till March 2011,a truly enormous negative for the Centres balance sheet. Even as it debates how to pay for food security,seeks ways to rationalise fuel subsidies,UPA 2 seems to be able to somehow,miraculously,view with equanimity the inevitable,huge hand-out these numbers indicate.

How long will this farce continue? Its patently obvious Air India seems unable to make a profit. Those who insist that it should nevertheless be the recipient of endless largesse from a cash-strapped government rely on idealised images of its profitability and the subtext usually is that its competition from private airlines,their right and ability to have access to profitable routes,that has done this to Air India. Government power over the market should be used,its argued,to help Air India in the manner of recent reports that the Star Alliance of airlines wanted to include two airlines from India in their expansion,and it was the government that balked at that,pushing for just Air India to access the benefits that would accrue from the alliance.

In short,its expected that the government has two choices: to either use state power to ensure that Air India makes profits,or to subsidise it heavily. The government must not buy into this,because there is,after all,a third choice. Get cracking on a roadmap to shut it down.