ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Privatisation Is Not Reform

The decision to privatise Air India comes at a time when the government’s “reform” credentials are being questioned by big business. All information publicly available points to a continuing improvement in the performance of the airlines. Between 2011–12 and 2015–16, the last year for which official financial results are available, the airline showed a steady improvement in terms of its operational profit/loss as well as its passenger load factor. The corporate business press is lauding the government’s privatisation decision, hailing it as the resumption of “reforms” which has come to mean more disinvestment and privatisation. It is hard to understand how mismanaging public assets and then selling them is “reform.”

The government appears to be on the fast track to privatise Air India (AI), the country’s flag carrier airline with the union cabinet giving its approval soon after a recommendation from the Niti Aayog. The chief executive officer (CEO) of the NITI Aayog revealed that it took only 15 days to come up with the report recommending total privatisation of the carrier. The Aayog did not see any need to consult the stakeholders of AI—employees, management or even the Ministry of Civil Aviation (MCA).

The last time a plan for privatisation of India’s public sector airlines had been mooted—only to be quickly abandoned—was during the tenure of the National Democratic Alliance (NDA) government of 2000–04 (PAC 2014: 154). The years following this were extremely traumatic ones for both the Indian Airlines and AI and after their merger in 2007, also for the merged entity, with a rapid deterioration of its finances.

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Updated On : 7th Jul, 2017
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