Open Skies Medicine
Officials of the two state-owned airlines have predictably come out with the worst interpretation of what the prime minister meant. In its pure form, open skies means unilaterally giving foreign airlines the freedom to operate in India without Indian airlines having similar rights in other countries. Those who insist on strict reciprocity in such matters will be strongly opposed to any such formulation. They will be unmoved by the fact that Air India cannot exercise all the rights that it has acquired under bilaterals and does not mind earning some revenue by giving up capacity that it should have itself filled. This is rent seeking and does not augur well for an airline in a world that is inexorably moving towards deregulation. Open skies can also mean giving some concessions to foreign airlines not substantial equity as in the Tata-Singapore Airlines proposal on the basis of a clear-cut strategy. Mr Gujral is known to have been in favour of the proposal in his earlier avatar but only he can clarify what he meant by open skies, and he should do so expeditiously.
Meanwhile, Air-India needs urgent resuscitation. It needs a new fleet of medium capacity-long haul aircraft to ply the routes it has the right to under the bilaterals. The prime minister has made an excellent beginning by eschewing the use of Air India aircraft for foreign travel. By using air force jets to go to Male and Kathmandu, he has spared the airline the bleeding disruption in schedules that it suffers every time a VIP hijacks one of its jumbos. Better inter-ministerial coordination is also needed to minimise disruption of Air Indias schedules over the Haj pilgrimage. Simultaneously, more autonomy will have to be given to Air India and Indian Airlines to allow them to function professionally. And once their operations have been brought back into the black, the government must disinvest its stake in them, eventually leading to privatisation. British Airways and Lufthansa have followed this route to success and thrived, whereas Air France has not and is slowly going under. If this policy chain is not initiated soon, and global airlines keep eating into Air Indias market share, there will be no chance of rescuing it from sure demise.