Chocks-on 19 MAR.,2014
NEWS
of AIR INDIANS ; BY AIR INDIANS ; & FOR AIR INDIANS
So here it is at last !! Great and a Welcome News !!!!
After all think tanks, in India and
abroad, private and government, have unanimously clamoured – THAT PRIVATISATION
IS THE ONLY OPTION LEFT IF AI HAS TO SURVIVE – this option may finally see
the light of day.
Ample hints on this were given in
various statements and actions. Shri Ajit Singh, had sounded about it months
ago, the BJP too had given similar signals, CAPA, KPMG and recently Tim Clark, CEO of Emirates, too had echoed
the same.
Some actions by the AI Management
too, viz., formation of Engineering and Ground Handling as separate companies
to ensure a lean, mean and thin AI, with a low aircraft to employee ratio,
consistent media pronouncements of improved revenue performance and bottom lines,
curtailing unionism to only 3 to 4 unions, aggressively resolving and integrating
all HR and career progression issues…..were and are all aimed at making the PRODUCT
AI attractive to potential investors, devoid of all the crippling baggage
of excess manpower, militant unions, etc.
Only lament is, had it been done 10
years ago, AI today, would have been in a different organisation altogether.
Anyways, ‘Better late than Never”…..
__________________________________________________________________________________
Air India: Privatisation in
air?
A high-level panel has suggested sell-off in loss-making
Air India over a five-year period.
Talks of
privatisation of loss-making Air India, which has a debt of over Rs 44,000
crore in its books, has received a push with a high-level committee asking the
government to dispose of at least three-fourths of its stake in the ailing
airline.
The national
transport development policy committee (NTDPC), headed by former RBI deputy
governor Rakesh Mohan and set up in 2010, has in its recently released report
recommended the government to reduce its stake in the flag carrier to 26% over
a five-year period.
The report
was released the Prime Minister Manmohan Singh earlier this month.
“A plan for
progressive disinvestment of the government’s stake in Air India over a period
of three to five years, based on a phased scheme with defined milestone, should
be achieved,” the report said.
“(Air India)
needs to be recapitalised, restructured organisationally, its working capital
debt burden written off and some divisions made independent and corporatism
(introduced) with government retaining perhaps a 26% stake,” it added.
The report
further noted that the national carrier's future prospects remain precarious as
the airline is overmanned and has failed to invest in technology needed to
retain its competitiveness.
“Air India
must therefore be provided the opportunity to reinvent itself with new
professional management, managerial and operational autonomy, while taking over
all existing productive assets,” the report said.
The airline
is expected to post losses in the region of Rs 3,900 crore for 2013-14, senior
company executives estimate, despite a projected 18% jump in revenues to
R19,500 crore.
The Union
Cabinet had in 2012 approved a turnaround plan (TAP) for the airline under
which the government would infuse over R30,000 crore in the airline over nine
years, starting from 2012-13.
The airline,
however, had to raise Rs 2000 crore from banks, at about 11-12% interest rate,
after the government was unable to give the airline the Rs 3,500-crore promised
for the current fiscal.
The privatisation
of Air India is now a certainty and will be a priority on the agenda of the
next government, said a recent Centre for Aviation (Capa) report.
“Despite the
fact that Air India’s performance has improved significantly across
operational, commercial, customer service and financial metrics under the
current management team, we rule out the possibility of Air India’s return to
profitability under its current ownership structure, given the underlying
structural problems and fast changing market dynamics,” the Capa report said.
“With the
carrier expected to post continued losses, the next government which takes
office in mid-2014, must finally bite the bullet and commence the privatisation
of Air India,” it added.
The total debt of Air India stands at about Rs 44,000 crore,
a senior Air India official had earlier told FE. “Half of this is aircraft
related” as the airline had taken a huge amount of loan to buy new aircraft,
while “the remaining amount, which falls in the region of about Rs 18,000
crore, are long-term working capital loans.”
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