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A K Bhattacharya: Air India's political baggage

State ownership of the national carrier has undermined the commercial principles that should drive its operation

A K Bhattacharya  |  New Delhi 

Civil Aviation Minister Ajit Singh has reportedly advised the state-owned carrier, Air India, to put an end to the practice of extending to its passengers the benefit of free excess baggage. You would imagine this is unusual. Why would a civil aviation minister worry about Air India offering its passengers free excess baggage allowance? Isn’t that a concern that is best taken care of by Air India’s operational management? But take a close look at how the country’s national carrier has been run in the past few decades, you will find several such instances of the airline’s micro-management by the civil aviation ministry or the minister, irrespective of who is at the helm.

Some years ago, much before Singh took charge of the ministry, the decision on what kind of blankets should be purchased for distribution to passengers during flights was taken in concurrence with the civil aviation ministry. In one such meeting, held at the ministry, the Air India management displayed a range of blankets so that the best variety could be chosen and purchased for passenger comfort! That, too, was unusual. Why shouldn’t the decision of buying blankets be left to the relevant division in Air India? The ministry had obviously different ideas.

If there is still any trace of unusualness in the instance of the ministry deciding to scrap excess baggage allowance, it could be so for a slightly different reason. Ministerial discretion over which passenger should get the benefit of excess baggage during a flight is what makes this a little unusual. And it is not just the minister who could distribute such favours, the power to extend free excess baggage on a case-to-case basis was wielded by senior ministry officials as well.

Note that all airlines allow their passengers free excess baggage allowance, depending on the merits of each case. But that discretionary power rests with a fairly junior official of the airline at the airport counter. In the case of Air India, the ambit of those who can exercise such discretion is much larger and it extends to officials in the civil aviation ministry and even the minister. That is the key difference and this is what makes this unusual.

Consider also how and why the ministerial crackdown on free excess baggage allowance took place and you will see how state ownership of the national carrier has undermined the commercial principles that should drive its operation. According to a newspaper report, the minister noticed a sharp rise in the requests that his office was receiving for allowing free excess baggage for Air India passengers. It also transpired that senior officials in the ministry were also empowered to grant these favours and the number of such requests coming to them was similarly on the rise. So, the minister decided to put an end to the practice.

That is a good move, but it will make only a limited impact unless the minister undertakes a comprehensive review of all the discretionary powers that his office or the ministry officials enjoy over the way Air India is run. Indeed this is also the reason why the government should privatise Air India, so that its operational management can take decisions based on commercial principles without any interference from the ministry.

One of former Finance Minister Yashwant Sinha’s Budgets had indeed made an announcement that Air India would be privatised, but that proposal never got implemented. It is doubtful if the trade unions opposed to the privatisation move have in the process secured any significant gains for the workers of the airline. If anything, civil servants and politicians have gained since they have continued to enjoy their discretion and power to interfere in the way the airline is managed. But for how long politicians and civil servants will enjoy such gains is a moot point. Air India continues to lose market share and its financial state, too, has deteriorated with most private-sector airlines doing better on all parameters. Note that its financial health has got worse even after continued financial support to the airline to help it stay afloat.

There is no doubt that Air India’s problems grew worse significantly after private-sector airlines began operating in the country and abroad. But it would be wrong to conclude that competition alone was responsible for this damage. The government’s management of the national carrier has been equally responsible for its woes. Deciding for it what kind of blankets should be bought and extending to its favoured passengers the free excess baggage facility are only two of many such instances that brought the airline down to its present state. The danger now is in believing that fixing such minor problems alone could help the airline recover from its current mess. Air India needs a far more comprehensive overhaul before it can regain its lost glory.

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First Published: Mon, August 27 2012. 00:31 IST
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