Explained: What is in store for cash-strapped Air India in 2020

National carrier Air India has been incurring continuous loss and the debt on it has also increased significantly. Union Civil Aviation Minister Hardeep Singh Puri has informed that the airline has been going through a loss of an average of Rs 26 crore on a daily basis. The cash-strapped airline has also stopped issuing air tickets to various government agencies on credit basis till the due amount is cleared. Previously, the officials and ministers travelled by taking a ticket from Air India on loan hence crores have not yet been repaid. In view of this attitude of government departments, Air India has now refused to give tickets on credit. Puri added that Air India has to be privatised. In short, the future of the airline is bleak.

In the midst of the mounting problems being faced by the airline, the contribution of the airline during the crisis since the past several decades has been magnanimous. The airline has always come forward to help in times of emergency and crisis in the country and abroad. Air India provided free service during the floods in Chennai and Kashmir, Indians trapped in Oman or other Gulf countries were also rescued by the carrier and it had played a major role during the Nepal earthquake. The query now arises that will the airline be able to the rescue of the people in emergencies like it has always done if it becomes private?

Puri had said, ”We have received many interests from private entities and established airlines for Air India. I had said earlier also, for us it is not an option, Air India has to be privatised.” He added that we want an Indian entity to acquire Air India. Talking about the privatisation of Air India Puri said, ” We do not become a slave to or victim of certain deadlines, we are doing it seriously. We are trying to do it (privatisation of Air India) as quickly as possible.”

Keeping in view its current losses and employee salary-related issues, Air India recently took a loan of Rs 500 crore, which was given by the central government. According to government sources, Air India has a debt of about Rs 58 thousand crores at this time, and it can be said that Air India is running at a huge loss. According to an estimate, Air India is incurring a loss of 20-25 crores per day. Therefore, the loss of Air India in a month is about Rs 750 crores.

In view of this, the Central government decided to privatize the government airline. Although this effort has been going on for the last several years, the government has not been able to get any buyers yet. Puri has also clearly stated in Parliament that the government is preparing for the privatization of Air India. For this, a High-Level Committee has also been formed under the chairmanship of Union Home Minister Amit Shah. But sources are telling that no major group has shown their interest in buying Air India yet and the reason for this is also quite clear because Air India has a huge loss.

The government is readying the bid document for selling off its entire stake in the national carrier and has set March 31, 2020, as the deadline for completing the disinvestment process.

Now the question remains as to what is the reason behind the loss of Air India? There cannot be a simple answer to this, because during the UPA government many decisions were taken that caused the health of Air India to deteriorate. The merger of Air India and Indian Airlines is believed to be the biggest reason for the loss of Air India. In 2006, Air India and Indian Airlines were merged. At the same time, many new aircraft were purchased, some expensive aircraft were taken on lease and the condition of Air India gradually deteriorated.

For the last several years, ministers and officials have been travelling on borrowed tickets in Air India. According to a senior Air India official, Air India has paid Rs 268 crore on government departments and ministries.

Currently, Air India has a total of 169 aircraft, out of which 13 aircraft are defective. In the last 1 year, Air India has not bought any new aircraft. Air India has a total of 20 thousand employees, of which 10 thousand are contractual and 10 thousand are permanent employees. The airline employs a total of 1,700 pilots and 4,000 air hostesses. Every day around 60 thousand passengers travel abroad from Air India. Recently Air India launched nine new international flights and also started flying on many new routes in India. Now direct Air India flights are available to these places–Kolkata-Dubai, Indore-Dubai, Mumbai-Nairobi, Amritsar-Toronto, Mumbai-Patna Sahib, Amritsar-Patna Sahib and Mumbai-Dehradun-Varanasi.