If you can’t sell it, you might as well pour $330 million more tax dollars into it, right? That’s the new plan for Air India.
Prime Minister Narendra Modi has asked Parliament for 23 billion rupees ($330 million USD) to “turn Air India profitable” once again. This comes after the Modi government tried and failed to privatize Air India earlier this year. I mean, who could turn down the chance to buy an airline carrying over $8 billion in debt that has not been profitable for more than a decade? Especially because the new owners will find all sorts of burdensome regulatory strings attached that will seek to keep entrenched interests satisfied while magically turning an inefficient airline into an efficient one.
How will India now make Air India profitable? The government has a four-part plan:
- a financial package
- a branding refresh
- organizational and governance reforms
- a plan to motivate staff
That’s according to Jayant Sinha, a junior Aviation Minister. How will staff be motivated? Who knows. How will the brand be refreshed? More new seats covers perhaps, like earlier this year?
The bottom line is simple: India will never let Air India go and will do whatever it takes to keep the carrier afloat.
Where is the outrage from Delta CEO Ed Bastian? Delta announced resumption of service to Mumbai starting next year. Will it now complain about this bailout that actually does hurt Delta’s chances of viability on its India route? He’s too busy tilting at windmills in Qatar…
The best way for the government to market Air India is to make international connections easier in Delhi and Mumbai and point out how much roomier economy class is on Air India than most of its competition. Expand the visa on arrival program and introduce some sort of stopover program in India as its Gulf competitors offers. That’s my two cents. But the Indian government’s plan to suddenly turn the airline profitable through four vague metrics and more cash is just laughable.
image: BriYYZ / Flickr (CC 2.0)