Jag Venugopal's Blog

May 17, 2011

Can India afford Air-India?

Filed under: India — Jag @ 2:40 pm

Update 05/17/2011: the more things change, the more they remain the same. Here’s a recycled blog post from the same time last year. Very apropos considering the recent (2011) Air India strike.

There is a lot of buzz around India these days, and the phrase “emerging power” is being bandied with wild abandon. But, make no mistake, India is still a poor country. A large portion of the population lives below the poverty level. There is not enough money to ensure proper roads, electricity and clean water.

Which makes the $1 Billion plus spent on subsidizing Air-India such a criminal boondoggle. The government of India has no business running an airline, much less taking a billion dollars that have much more worthwhile causes, and spending it on Air-India’s creaky planes and recalcitrant workforce.

As is evidenced by recent strikes, Air-India’s workforce is answerable to no one. The government is spineless to control its unions, and management has to bow to politicians’ diktats. The company has one of the largest staff-to-aircraft ratio in the world. About the only beneficiaries of Air-India are its employees who hold it to ransom at every step, politicians and bureaucrats who get discounted or freebie tickets and kickbacks from contracts, and the last of India’s commies, to whom the ownership of large national firms is an absolute necessity, no matter the cost.

When talk of privatizing Air-India comes up, the excuse often trotted out is that some foreign carrier will buy it and submerge the Air-India brand. India will, it is argued, be left without a national airline as its flag-bearer.

I say, so much the better. Let the masses fly Jet Airways or for that matter British Airways or Lufthansa. I think India’s prestige will be better served by spending the money lost on Air-India towards clean water, electricity and roads. For a start, how about clearing the slum just outside the Mumbai airport, so travelers arriving early in the morning don’t see a total gross-out scene as their first impression of India?

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