Air India to bring back past glory with a foreign partner
31 March 2000 23:02 IST The civil aviation ministry has decided to involve a foreign partner to run Air India more efficiently by increasing its equity participation, in order to bring back the past glory of the corporation.
Civil aviation minister Sharad Yadav, who was in Goa to attend the two-day Parliamentary consultative committee meeting on civil aviation, confirmed that the government is trying hard for foreign equity while maintaining government control over Air India.
"It is the most prestigious corporation of the government and we cannot compromise with the national interest while doing this exercise", Yadav clarified. He however once again ruled out similar kind of foreign equity participation in domestic airways.
Stating that the disinvestment commission has suggested to increase the equity participation in Air India from Rs 153 crore to almost Rs 1000 crore, Yadav feels that there is not option left than going for foreign equity participation. He however declined to spell out the amount of private equity participation.
In order to improve the deteriorating state of the Air India, Yadav said the cabinet has already given nod for a VRS scheme for its 17,500 strong workforce, which would be made applicable to all except the licensed pilots and engineers. He is hopeful of at least 1000 employees opting for it while also making it clear that fresh recruitment would be restricted in future.
Citing out unlimited workforce as a prime reason for the present condition of the Air India, the minister said the wage burden has increased from Rs 256 crore in 1989-90 to Rs 1165 crore in 1999-2000. The Air India's flight-employee ratio goes up to 1 : 7000 against the international average ratio of 250, he added.
While claiming that the Air India would be made a profit-making venture once again, Yadav provided figures of annual losses. "The amount of losses is coming under control", he said, stating that Rs 296.94 crore of loss in 1996-97 would come down to around Rs 170 crore in 1999-2000.
While the losses till December 1999 amounted to only Rs 71 crore, he said at least Rs 90 crore more would be added to it by the year end now. It was Rs 174.48 crore last year, much less than Rs 181.01 crore of loss reported in 1997-98.
Discussing solely how to improve Air India's functioning at the meeting, the consultative committee has also suggested other measures like rationalising its route by taking profit-making routes while also rationalising the freight structure. The committee is also expected to discuss a detailed studied paper on ways and means to plug leakages in the corporation.
