Silly Charges!

 

NDTV reports :-

Air India responds to allegations of overcharging Indians in Cairo

“Air India Ltd would like to clarify that it ONLY recovered costs and NOT made any "huge profits" as alleged/propagated by some quarters. “

I find these charges totally silly. There is no way Air India will make profit if it wants to – they just don’t know what “profit” is.

Its not about Air India

Some developments on Air India’s Financial woes and my views :-

AI Chief Jadhav told Patel that AI urgently needs equity and soft loan infusion from the government to be able to keep flying. To tide over its problems, the airline is learnt to be eyeing Rs 10,000-15,000 crore as bailout package. But since the finance minister has already told them to get real and seek a `realistic' figure. Any amount higher than Rs 4,000-5,000 crore is being billed as unrealistic.

The cause of this misery can’t be attributed so much to a ‘slack in demand’ as much as it can be attributed to the inefficiencies within which the airline operates – to name one - Highly paid and inefficient staff responsible to no one but god .Yes! Thanks to tough labour laws – it is impossible to remove someone even if he simple declares that he is not going to work and this actually happens.

Now – I wouldn’t mind baling out AIG so much as I will mind bailing out Air India – why? Simple – my lack of trust, not in Air India or its staff – but the system that encourages inefficiency and lax competitive spirit.

AI also requested for a relook at the massive bilateral agreements India has signed with foreign countries in past few years that has allowed their airlines to virtually flood Indian cities big and small with flights at rock bottom fares.
The cash-strapped national carrier has also asked the government to make it compulsory for government employees travelling on official trips to use only the AI which would inturn get some revenue. At present, officials can take any airline they want with AI featuring pretty low on preference list.

What does both the above points tell us?

Socialism produces ‘losers’ who fear at the very word competition and these ‘losers’ want free lunches..!!

Reversal of ‘open skies’ policy would mean monopoly, thereby Higher costs and lower service levels.This would effectively be travelling back in time to socialism.Huh!

"The Prime Minister has said that the entire weight of the government is behind Air India. It is a national carrier and it is our pride. But there is a condition that Air India must put its best foot forward. The employees must realise that there is a problem and it is a cumulative problem," Patel said.

Now, only if Mr Patel himself ever sat on an AI flight, he would realize that it is not a ‘national pride’, it is a ‘National Shame’. Air India gives you a look and a feel of how things work in India much before you actually land in India.

This problem is bigger than they are making it sound, its not just about Air India that I am talking about. It is a generic problem.Isn’t it time for some labour reforms?Can’t India get someone like Deng??

Got hold of an interesting piece from Bloomberg which says that the chief of Airline’s parent company V.Thulasidas had expected the airline to return to profitability in the year ended March 2009. Considering that the airline made a loss of 5000 crores last fiscal – I wonder what the hell was that man thinking!!??

In my previous post, Charakan wanted to know my views on “hundreds of bankruptcies in US including that of General Motors and the way the Government is trying to bail them out”.

Hmm..Now – I am no financial expert ( as yet ) , but I would rather study it case by case instead of just answering that question in one shot – if you know what I mean.

I certainly believed that AIG was too big to fall and the world would have come crashing down if AIG was allowed to fall.I don’t see any such thing happening with the fall of Air India. The next point as I made above is – its not that I believe in AIG or its employees - its my faith in the system to return to profitability and its competitive attitude that I believe in.

Recommended Link :-

KingShuk Nag gives some examples of how Air India was run.

Nehru’s Legacy

Nehru’s Legacy continue to disappoint us :-

Air India Bankruptcy

I bet the 30,000 crores that we got from ‘disinvestment’ over the time looks like 'peanuts' now??

It is not just Air India, our whole economy typically worked like that before 1990.