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Here is the 'real' reason Air India is not being privatised

DailyBite
DailyBiteOct 01, 2018 | 18:45

Here is the 'real' reason Air India is not being privatised

The government owes the national carrier Rs 1146.86 crore of travel and maintenance expenses.

The government seems inexplicably cruel to Air India.

Its grand plans of divesting the national carrier, which has been bleeding losses for decades now, failed to take off in May because no bidder turned up to buy it. One of the reasons was the huge debt Air India is saddled with — a portion of which the buyer was supposed to take over.

The airline is in dire straits — a few days ago, oil marketing companies (OMCs) asked it to start paying for jet fuel daily or face a supply cut, because it hasn’t cleared payments for almost one and a half years.

Air India's total debt as of March 2018 was Rs 50,000 croreOn a wing, prayer and several loans: Air India's total debt as of March 2018 was Rs 50,000 crore. (Photo: PTI/file)

Yet, one of the biggest users of Air India is refusing to pay up — that user is the Government of India.

According to a reply received to an RTI query, the government owes Air India a whopping Rs 1146.86 crore. The biggest defaulter is the defence ministry, which has outstanding bills of Rs 211.17 crore, the cabinet secretariat and the PMO owe Air India Rs 543.18 crore, and the external affairs ministry Rs 392.33 crore.

Air India is the nation’s flag carrier. Being beholden to various national and international lenders and being pressured to pay up doesn’t do any favour to its, or the country’s image. Also, salaries of Air India employees have been delayed for the past six months. As recently as last week, the aviation ministry has written to the finance ministry asking for funds.

Earlier in September, according to a report, “Air India had sought Rs 500 crore through short-term borrowings to meet its working capital requirements. In July, the government had sought Parliament’s approval for Rs 980 crore in supplementary grants towards equity infusion in the national carrier. The amount is still awaited by the carrier.”

Both these amounts are smaller than what the government owes to the carrier.

Why is the government willing to bail Air India out with grants — but not make legitimate payments?

According to the Press Trust of India, some of the oldest pending bills, for the visits of the president, the vice president and for evacuation flights, are nearly 10 years old.

However, the dues have seen a striking jump between January and September this year.

In another RTI reply given by the government in March this year, the total outstanding bills were at Rs 325 crore on January 31. In eight months, they managed to rise up to Rs 1146.86 crore — an increase of Rs 821 crore.

And this unwillingness to pay bills starts from the highest levels. According to PTI, as much as “Rs 47.37 crore was pending towards six visits of the Prime Minister to the United States, African countries, Uzbekistan, Vietnam and Thailand between November 9, 2016 and February 10, 2017.”

Bills of Rs 206.19 crore towards 22 visits of the Vice President, between June 2008 and March 18, 2017, are pending with the MEA.

Air India provides chartered aircraft for VVIPs, modifying its commercial jets to suit their needs.Then, it doesn't get paid for it. Air India provides chartered aircraft for VVIPs, modifying its commercial jets to suit their needs.Then, it doesn't get paid for it. (Photo: PTI/file)

For a government that asked people to give up their LPG subsidy — and a nation gladly obliged — this conduct is hardly inspiring.

One of the arguments made against the sale of Air India to private hands is that the national carrier carries out evacuation and relief missions in areas hit by natural disasters, wars, etc., something a commercial entity might not be too willing to do.

However, even these Good Samaritan operations have not done poor Air India much good — bills for the evacuation services it provided in the war zones of Iraq, Malta and Cairo have not been paid by both the UPA and the NDA governments. In fact, the national carrier has not even been paid for the relief it sent to the USA during Hurricane Katrina in September 2005.

The heroics we saw in Airlift were based on the actual evacuation of Indians from Kuwait by Air India. The heroics we saw in Airlift were based on the evacuation of Indians from Kuwait by Air India in 1990. The government has not paid it for several such operations. (Photo: YouTube)

It is the taxpayers who pay for Air India’s bail-outs. It is the taxpayers who pay for our leaders’ foreign travels.

Another major reason no private player bid for Air India was that the government wanted to retain 24 per cent of direct stake in the airline. Does the Centre want to stay involved with the AI only so it can use its services and not pay?

Instead of making our flag carrier beg for debt extensions and be humiliated by oil companies, the government should spend our money on making Air India stay up on its own wings. A good place to start would be paying off its own debts.

Last updated: October 01, 2018 | 19:34
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