Will privatisation of ailing Air India bring Achhe Din ?

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AI needs to be pulled out of ventilator
The Air India privatisation proposal is in debate in the recent times with concern over the huge debt burden on the airline. The new Government led by Prime Minister Narendra Modi who promises 'Achhe Din' based on his policy of 'minimum Government, maximum governance' should definitely plan to revamp the aviation industry. Keeping in mind the Air India's woes, privatisation seems to be the only viable solution at present for the Aviation Ministry led by Ashok Gajapathi Raju.

The Ministry who is keen in improving the performance of the airline has given safety as the top priority. The employees of the Air India wants to pull the ailing airline out of ICU with a hope of right policies under the NDA Government.

The statistics show that Air India incurred losses of Rs 35,000 crores ($5.9 billion approx) in the last 6 years with losses of 2013 alone being more than the total higher education budget of India. This makes us think that aviation sector is another priority for the Modi Government.

But the big question is with Government's own finances in doldrum, from where the bail out packages will come from? The competition from domestic airlines has also made it worse for the ailing airline. With doing away restrictions on domestic airlines flying abroad, for example the new airlines like TATA- Singapore Airlines could be an opponent.

According to news reports, AI continues to lose money to the tune of Rs 11 crore a day, translating into a total drain of over Rs 4,000 crore. This is serious crisis in the aviation sector which needs to be immediately addressed. Apart from that the Government already have other important sectors like railway, infrastructure, economy to focus on than to lose money on a state-run airline.

AI continues to lose money to the tune of Rs 11 crore a day

The Ministry trying to bring reforms in the airline by pushing for open access to aviation turbine fuel (ATF) for airlines. The move would enable airlines to import ATF to airports rather than buy it from States at higher prices.

Also at the same time in a significant development which can increase Air India's revenues by 4-5 per cent, the Star Alliance Chief Executive Board (CEB), at its meeting in London on Tuesday gave an endorsement vote to induct Air India into the fold.

"We are happy to note that Air India has become part of the Star Alliance. This is one of the biggest alliances in the world", Civil Aviation Minister Ashok Gajapathi Raju said.

With this, Air India becomes the first Indian carrier to join a global alliance, the largest one now having 27 member airlines in its fold.

The move would help Air India passengers to access the alliance's global network of over 21980 daily flights to 1,328 airports in 195 countries.

Even though debate on privatisation is going on, the Government should make sure that entire funds allocated for debt-ridden airline is not wasted. The focus of the aviation ministry should be to revamp the airline so that the Government can expect possible investment proposal by a private enterprise.

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