Air India and Ripley’s Believe It or Not

This must be a case straight out of Ripley’s Believe It or Not. It goes something like this: “An instance of money which should be used for welfare of the poorer sections of the society being diverted to feed the rich and help them indulge in their excesses”.

Ladies and Gentlemen – the answer is the “The curious case of Air India and the Indian Government”. Air India is the “Hero” (or read that as Villain) and the Superman here (or replace it with your favorite Comic book hero)¬† is the Government.

As reported, Air India is in serious trouble and needs a bailout in the form of at least 5000 – 10,000 crore at the minimum to sustain operations. The Government has decided to help them out with tax payer money. In return for that the Government wants Air India to restructure itself and start performing efficiently. As per the Government this is required since Air India is the pride of our country.

I found the comment “Pride of our Country” fairly hilarious and swung between moments of laughter and sadness at the comment.

Are we talking of pride when:

  • The airline has been losing market share all these years
  • Inefficiency and punctuality has hit rock bottom
  • Its last balance sheet shows a loss of 5000 crore
  • Is the last choice of flying for most fliers and this includes us Indians

There are probably a zillion other points but these are enough to confuse me as to what pride we are talking about when the pride has been punctured as badly as the tires of my car are on the potholes of Mumbai.

Giving benefit of doubt is something that we have learned from watching years of cricket on TV and given that precedent, in all fairness should I say, take a look at the measures that the Government is talking of vis-a-vis Air India:

  • Give it a capital of at least 5000 crore at the minimum
  • Reduce its expenditure
  • Reduce salaries of employees
  • Restructure Management
  • Bring in Independent Directors
  • and the list will increase over time ….

I think the above are text book answers to the current problem at hand. In all the above measures we are simply curing the symptom instead of the disease. If a man smokes regularly and falls ill, we give him medicine to cure whatever illness ails him. But are we doing anything about the smoking habit. Sadly not because we choose to treat the symptom rather than the problem. In all probability the problem is the people (at all levels in Air India) and the mindset and pride (if any) they have in doing something about Air India. In the absence of that all possible solutions will fly away earlier in the air than Air India itself.

Let us for a moment agree on all that is going on. Yes – Air India needs to be saved. Yes – all the measures taken by the government will succeed. But let us look at whom this might eventually benefit. It will benefit a minuscule percentage of India’s population. And this minuscule percentage comprise the cream of the society (in terms of wealth) and to whom the demise of Air India will not matter the least bit. They will move on to other airlines and to other bureaucratic positions. And Life will go on.

Finally – I wish to end by comparing this to Stock Market Investments. Most of us individuals have dabbled in stock market sometime or the other. For the seasoned investors, there are times when a particular stock is not doing well. You bought it at say 1000 Rs and now it is at 500. You know very well that something is wrong with the company, its management, bad results, bad debt, etc. But inspite of that you increase your position at the lower level and hope to average out. The stock falls further and you still buy at the lower price. Finally wisdom dawns and you put your ego aside and accept that it was a mistake or a bad selection and stop betting on the horse. The moral of the story : It is better to save what you have remaining now and use it for better long term prospects rather than lose everything sooner or later by betting on the wrong horse.

Our men in corridors of power have read somewhere that “A wine improves with old age” and probably they are still thinking of that being true in the case of Air India. But somewhere they forgot to read the rest of the statement, which is “A wine improves with old age. But only if the grapes were good in the first place”.


4 thoughts on “Air India and Ripley’s Believe It or Not

  1. Welcome to blogging!

    It is better to save what you have remaining now and use it for better long term prospects rather than lose everything sooner or later by betting on the wrong horse.
    Words marked and remembered!

  2. Good post. I concur with your comments. This pride business has hurt us throughout history and prevented us from accepting the truth however harsh it is.
    Air India has highest no of people / plane, no wonder it is making losses. The unions are talking of strike, well the airline should remain alive for them to go on strike!

  3. Well placed.. another problem is the poor quality of air hostesses.. i guess Air India is the only Airlines that has 50+ air hostesses.. the airlines should have a tagline.. will only serve 50+ even they would not prefer worn-out hostesses.. And secondly and one of the main culprits that have bought Air India down to this position is the Union… the union system should be abolished at least for government organizations …

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