By K Raveendran
By all indications, Air India will land up with its original owners as Tatas are believed to have the best chance of clinching the deal. The other bidder is a consortium of Air India employees in partnership with US-based NRI investment fund Interups has relatively less credible credentials.
While the ‘ghar vapasi’ of the national airline is in far worse condition than when it was acquired by the government, although that does not make the re-possession any less sweet.
For, the impact of Air India in the lap of Tatas will be similar to the entry of Jio in telecommunication, which has progressed beyond imagination in its relatively short period of existence, but brought cataclysmic changes in the industry, introducing large-scale sickness in the rest of the sector in the process. While initially, Jio has altered the terms of operation in favour of the customers, its near monopoly has long term adverse implications for the users, the signs of which are already visible.
Air India falling into the hands of Tatas would introduce a similar shift in the aviation sector, as the national airline will give them much control of the market. With Air Asia and Vistara, already with significant market shares of their own, the addition of Air India would give complete domination of the sector, particularly in terms of international traffic, and to a lesser extent in the domestic sector as well.
With monopolies such as Emirates controlling the market dynamics of international traffic, another monopoly player would clearly work against the interests of the customers as the Dubai airlines has been actively pushing rate coordination among airlines to keep airfares high. Most significantly, Emirates and Air India are the two dominant players in the highly profitable Gulf sector and further cartelisation portends dangerous implications for customers. Further, Air India under the Tatas, as opposed to its public ownership, will give the dominant Gulf-India sector players unfettered freedom to control prices.
It is also pertinent that this sector has been largely responsible for Air India being reduced to its current situation, apart from the inexplicable acquisition of 111 aircrafts from both Boeing and Airbus during the UPA rule, for which there is no apparent justification except the potential for kickbacks and backroom gratifications.
The civil aviation ministry under the UPA regime virtually handed over the highly profitable sector to Emirates on a platter, which meant that Air India was giving up that many seats. It was common knowledge in the Gulf aviation sources that for every seat booked on non-Air India flights, a certain amount of money was going into the pockets of those who were in charge of Air India. Obviously, this could not be done without the viability of the national airline being jeopardised.
The bonhomie between Dubai ruler Sheikh Mohammed bin Rashid Al Maktoum and Chandrababu Naidu when he was chief minister of Andhra Pradesh provided a convenient cover for Emirates in its market expansion policy, which ended up in Air India giving away large number of seats to the Dubai monopoly. A thorough investigation would bring out the conspiracy behind these deals. This reduced Air India to an airline with routes that were largely a liability rather than profit-generating.
The aircraft purchases worth about Rs 70,000 crore and further their leasing to other airlines along with the surrender of profit-making routes are already under investigation by Enforcement Directorate and CBI. Also under the scanner is the merger between Air India and Air India Express, which was used as an alibi for the large-scale acquisition of aircrafts.
In fact, the CBI has filed four FIRs relating to the controversial merger as well as the purchase and subsequent leasing of the aircraft, possibly leading to large-scale generation of black money. But most importantly, these cases have been registered against unidentified officials of civil aviation ministry and Air India, which means that the deals had been done as a perfect cover-up.
The Comptroller and Audit General had also questioned the rationale behind the government’s decision to order 48 aircraft from Airbus and 68 from Boeing for both for Air India and Indian Airlines and called the decision a ‘recipe for disaster’ and squarely blamed the Ministry of Civil Aviation, Public Investment Board and the Planning Commission.
The loot will remain as one of the most notorious scams seen by the aviation sector, both globally and domestically, for a long time to come. (IPA Service)