oppn parties The Maharaja Will Be Fully Privatized

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  • Karnataka HC has ruled that a harassment complaint lodged by a wife after receiving a divorce notice from the husband loses its weight in the eye of the law and quashed the FIR filed by a women against her husband and in-laws
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  • Kerala chief minister P Vijayan says Centre's decision to cut the borrowing limit of the state is 'sadistic' and shows its negative mentality towards the state's development
  • Rahul Gandhi recieves passport, set to travel to the US
  • Centre said that the march-to-Parliament by wrestlers was a 'deliberate provocation'
  • Prime Minister Modi inaugurates the new Parliament building, calls it 'cradle of empowerment'
  • Mamata Banerjee will most likely attend the opposition meet called by Nitish Kumar in Patna
  • With container prices, which were on fire, crashing by 40% YoY, importers and exporters in India heaved a sigh of relief as the burden of high freight costs will reduce
  • In an aim to push lenders to manage risks better after the US financial crisis, the RBI has reviewed bond value norms
  • 14 countries under the Indo-Pacific Economic Framework (IPEF), including India, entered into an agreement to boost supply chains and counter China
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  • In a shameful incident, Delhi Police manhandled international wrestlers when they sought to march peacefully to the new Parliament building to highlight their greivances, detained some top wrestlers
Fifth IPL title for Chennai as Ravindra Jadeja hits 10 off last two balls to spoil the party for Gujarat Titans
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The Maharaja Will Be Fully Privatized

By Sunil Garodia
First publised on 2020-01-28 13:35:36

About the Author

Sunil Garodia Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator.

The Centre has finally decided to sell the full 100% stake in the beleaguered state airline Air India. This is good news as the carrier has been bleeding for the last few years and draining valuable resources. It has not also been able to operate many flights for which it has route permissions. The government has also reduced the quantum of liabilities the bidders have to take on by almost a third. The logo and other motifs associated with the airline have to be mandatorily used by the successful bidder for a pre-decided time period. Since the liabilities are now fully covered against the cost of the aircrafts with the airline, it makes for an attractive proposition for the bidders.

The government has decided not to include certain assets like the iconic Air India building in Mumbai and other properties across the country along with some valuable artifacts and paintings in the deal. That is basically of little consequence in a deal of this size. But the biggest worry that remains is that of the bloated workforce. In 2019, the carrier had 11000 permanent staff and a government paper indicated that only 37% would retire in the next 5 years. That would still leave almost 7000 on the rolls, making its salary bill almost 35% higher than the industry norm. Yet, instead of offering VRS, the government kept on pumping good money after bad in a bid to revive the carrier. In this age when companies are becoming leaner to survive, Air India is suffering for its past follies of hiring more people than required.

Any businessman who makes a bid would have that uppermost in his mind. It is very difficult to take a company with enormous liabilities (although with equally enormous advantages like attractive route permissions and docking slots all over the world) along with a bloated workforce and turn it around. Air India is also disadvantaged as it is a full-service airline operating in a sector that has cut all frills and costs. Despite this, its market share has kept falling. Any successful bidder would definitely like to shed a major part of the workforce and the government must facilitate this in the long-term interests of the airline.