New Delhi: All options for Air India, including a proposal by government think tank NITI Aayog to bring in a strategic partner, are on the table, aviation minister Ashok Gajapathi Raju said in an interview on Wednesday. “That’s one of the alternatives that could be possible," Raju said. “We have to come to some decision. Business as usual is not an option; otherwise Air India will close down."
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The state-owned airline has a debt of about Rs50,000 crore, of which about Rs25,000 crore are loans taken to buy aircraft. The Economic Survey 2017 recommended that the government privatize Air India, where debt piled up and losses mounted following an aircraft deal worth $11 billion around 2005 and a botched merger with erstwhile domestic carrier Indian Airlines. The Central Bureau of Investigation (CBI) is probing what went wrong at Air India during the years the Congress-led United Progressive Alliance (UPA) was in power. Edited excerpts:
Until early this year, the UDAN regional connectivity scheme was moving at full steam and Air India was going ahead with its expansion. McKinsey & Co. was hired to provide a road map. Then suddenly we see so many articles and public statements on disinvestment in Air India. What happened?
Air India is a good airline. Its finances are awful. Finances are more because of legacy issues. I don’t want to go into why one has arrived at those decisions and all that but there are legacy issues which can’t be wished away. Now from day one I have been saying that Air India’s problem has been its finances and it’s a debt trap situation despite the fact that the previous government has given a turnaround plan and a financial reconstruction plan. So taxpayers’ money is also going to Air India and somehow things are not working out. So business as usual is definitely not an option.
So where is it headed?
I myself don’t go into Air India bashing, I like that airline. I like it to survive and under what type of structure (we have to see). Because if it survives it gives employment and if it crashes... in private sector Kingfisher Airlines crashed. If anything crashes then no one gains, much less the country. Wide consultation is going on.
NITI Aayog has leaned on the option of bringing in a strategic investor.
Let us see. That’s one of the alternatives that could be possible. Let us see where it takes us. We have to come to some decision. Business as usual is not an option because then it will close down. If it closes down everyone loses, no one gains.
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Air India employees are very concerned. There have been Facebook posts and letters, etc since this storm hit them. Will you be able to say to the employees that whatever happens, their jobs will be safe?
The whole thing is to see it survives...If it crashes no one gains. Actually anyone would be concerned about their future. It’s human instinct. But there are problems. It’s not as if they don’t know aviation.
Personally you would like it to stay within the government fold or would you like it to be a board-managed strategic investor-driven firm?
Personally I would just like it to survive and serve the Indian skies. But that’s a personal thing, and obviously those who like Air India would like it to survive.
CBI is launching an investigation on decisions taken on Air India by the previous government. Do you think there was criminal intent to harm Air India?
Certain decisions on Air India did not make commercial sense —merger, aircraft (purchases). Everyone in their wisdom has taken certain decisions. You can’t put the clock back. You have to work on what you have got. The criminality is (being looked into by) an investigation going on under the court order. Our position should be ‘we should cooperate’—whatever information they want (they will get). And probably investigation agencies would have information from other sources - like money trails—we don’t know. We just have to cooperate with them. Whatever emerges, let it emerge.
Given that a CBI inquiry is going on, do you think any strategic investor would like to come into Air India?
That has nothing to do with this. This is a transaction to take it forward. If you do not get people interested, then how do you do it. You have to be realistic, otherwise it is not going to work.