Letters: Restructuring Air India

Tatas in India are known for their business ethics, grace in dealings and philanthropic approach

With reference to “IndiGo wants Air India’s overseas business” (June 30), the national carrier is reported to be up for sale following its huge accumulated losses and mounting debts. Air India is believed to be carrying a whopping debt burden of close to Rs 50,000 crore, which is unsustainable. The carrier is also believed to be spending Rs 4,000 crore every year on servicing debts. The real problem began with the merger of Indian Airlines with Air India a few years ago. The best option is to restructure by inducting some strategic private partners. The government is reported to have rightly approached the Tatas who were pioneers in the aviation business.

 
The Tatas in India are well known for their business ethics, grace in dealings and philanthropic approach, and it is perhaps the one amongst very few business enterprises that has the characteristics of both the public and private sectors. That could well fit into the government scheme of things and possibly the Tatas might respond to its offer by submitting an appropriate proposal. Yet, it is doubtful if the carrier would be able to effect a turnaround. Thus, even with this arrangement the government will perhaps continue to nurse for sometime longer until the restructured entity is able to stand on its legs. Alternatively, besides Tata as the main player the government can also think of inducting a few more such strategic partners including existing private airlines such as IndiGo that have proven experience. In that case, the debt burden will not fall on one partner, which would be difficult to manage. India has adopted a mixed pattern of economy where both the public and private sectors have an equal and important role to play in the socio-economic development of the country. Srinivasan Umashankar   Nagpur

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