Should Air India be privatised? This question had been put to me when I was its chairman and managing director. My answer at that time was that it was for the owner, the Government, to decide. My job was to run it as a public sector company. I believed strongly that it could be run well as a public sector company.

Privatising Air India need not necessarily solve its current problems. If that were the case, why should Kingfisher have closed down? Why were Air Deccan and Air Sahara sold? EastWest, Modiluft, Damania? PanAm was a prominent airline in the West that went bankrupt 20 years back. On the other hand, some airlines do well despite being owned by the government, such as Singapore Airlines. Clearly, ownership is not the only factor to determine an airline’s fate.

Air India was a private airline. The Air India of today was formed in 2007 after the merger of two PSUs, Indian Airlines and Air India. But these PSUs had been created in 1953 after nationalising the private airlines in operation at that time.

Air India was owned and operated by the Tatas. Its international operation was nationalised into Air India and its domestic operation, along with other private domestic airlines, into Indian Airlines.

While I do believe Air India can be run well as a PSU, I am also a believer in empowering the stakeholders in any enterprise. In Air India’s case, the people of India, as its ultimate owners, and its employees have major stakes in the welfare of the airline. As CMD, I was keen that part of Air India’s equity be sold to the public and its employees. The unions of Air India were also in favour of privatisation to this extent. Once the shares of the company were listed, with part of it with the employees, each shareholder’s desire for personal gain will ultimately drive his performance to the greater good of the airline.

I was not in favour of full privatisation, however, because of my own experience with the private airlines which were members of the Federation of Indian Airlines, the newly formed industry body of which I was the first chairman.

I had seen them in operation at close quarters and was not really enamoured of their ways (with honourable exceptions). I saw that the public sector airlines were much better off in several respects.

Hence, I believe there are good reasons for partial privatisation of Air India. Once that succeeds, the Government can then take a view on whether to privatise it fully.

Read also: >Can privatisation work for Air India? No

(The author is a former CMD, Air India.)

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