Infosys Ltd’s former top official T.V. Mohandas Pai has set the cat among the pigeons by asking why everybody is singling out Kingfisher Airlines Ltd for the losses caused to the public exchequer when Air India has arguably been a bottomless pit for public funds.
Kingfisher Airlines was grounded at the end of 2012. Let’s take a look at how Air India and Kingfisher stack up (over a three-year period till 2013). The details are in the accompanying table.
The table shows Kingfisher’s loss after tax rose to Rs.4,300 crore for 2012-13 from Rs.1,027 crore in 2010-11. Sure, Air India shows a decline in loss during the same period. But its loss of about Rs.5,500 crore for 2012-13 was 27% higher than that of Kingfisher.
Now consider the debt figures. As on 31 March 2013, Air India’s total debt (long-term borrowings plus short-term borrowings) was an enormous Rs.47,328 crore, while Kingfisher’s debt was Rs.8,658 crore. Air India’s deterioration in net worth is higher than Kingfisher’s in this period.
According to its 2012-13 annual report, Kingfisher’s accumulated losses at the end of the year stood at Rs.16,024 crore. News reports peg Air India’s accumulated losses in the same period at over Rs.30,000 crore. Clearly, Air India’s financials were far worse than that of Kingfisher’s, and there has been little improvement so far.
True, there’s a difference between Kingfisher Airlines and Air India in the sense that nobody has alleged any fraud in the public sector airline. But the fact remains that the amount of public funds lost so far in Air India is higher than that lost on account of Kingfisher. True, it is conceivable that Air India may turn the corner, but it is also possible that it may continue to incur losses in future.
How is the government’s attitude to Air India any different from that of the bankers to Kingfisher who continued to support an enterprise whose net worth had been wiped out in the hope that it would turn around? Is it fair for private sector airlines if the government continues to throw good money after bad in Air India? And how exactly does its cavalier attitude to Air India’s losses fit in with the prime minister’s professed policy of minimum government?