Chasing past due invoices, Air India has informed government agencies that it is unwillingly to extend further credit until balances are zeroed.
Tickets will no longer be issued on credit to those agencies who owe Rs 10 lakh (about $14,000) or more. Air India estimates that it is owed a combined Rs 268 crore (about $37,600,000) from various government agencies.
But like any Air India policy, there are exceptions. At least three major agencies, including the Airports Authority of India (AAI), Ministry of Civil Aviation (MoCA) and Labour Commission are exempted and will still be issued tickets on credit.
Apparently, this move comes only after Air India has sent several reminders to government agencies that have simply been ignored.
I write about this because the issue strikes me as a tad ironic. It’s not like Air India is the only state-owned airline that extends credit to government ministries. Nor is it the only airline that has encountered collection issues.
But what kind of a twisted system is Air India and the Indian government running? Keep the carrier afloat through tax-payer funded bailouts while allowing government agencies to rack up millions of dollars in unpaid tickets? This is in addition to the stories of upgrades for government officials, their families (friends and acquaintances) or exceptions to the baggage allowance rules.
Look, I get it. And again, I don’t even single Air India out. It’s a “one hand washes the other” sort of airline. But how is the airline ever supposed to return to profitability with these sorts of shenanigans? How is there even an expectation of performance with this sort of management?
Air India’s status as a poorly-run state carrier, cannot simply be blamed on Air India alone. Instead, the problem is the system itself, which creates an environment in which Air India cannot flourish.