Air India deal facilitates an oligopoly: CTUs to PM

Our Bureau New Delhi | Updated on October 19, 2021

Says that the sale offers the Tatas greater avenues for profitability

Central Trade Unions (CTUs) have urged the Centre to roll back the policy of selling national assets, including the proposed sale of Air India.

In a joint letter to the Prime Minister Narendra Modi, the 10 CTUs claimed that the sale of Air India to the Tatas facilitates an “oligopoly”.

“The combined revenues of the three airlines — Air India, Vistara and Air Asia (the latter two also owned by Tatas) — amounted to ₹40,500 crore in 2020, out of the total industry revenue of ₹95,700 crore, about 42 per cent, whereas Indigo, has a market share of about 37 per cent. By any account, this would mean that privatisation of Air India has resulted in one of the most concentrated markets in India,” the CTUs claimed in the letter.

‘Flawed policies’

They said the context of Air India’s debt burden arises from four specific sets of policies adopted by the Centre such as the decision in 2005-2006 to purchase 111 aircraft by Air India and Indian Airlines, the “forced merger” of the two airlines, aggressive pursuit of an “open skies” policy and the systematic neglect of Indian public sector airline companies to please private players.

Also read: Can the Tatas fly a full circle into cargo business?

The letter added that the sale offers the new owner greater avenues for profitability because of the assets Air India owns including 141 aircraft, of which 118 are airworthy, its Airbuses, as well as “relatively new” Boeing 737s with Air India Express. “The Tatas, therefore, are acquiring an airline, its fleet, its well-trained workforce as well as 4,400 domestic and 1,800 international slots at Indian airports as well as 900 overseas. Clearly, this is a sweetheart deal for India’s oldest and large conglomerate,” the letter added.

The unions urged the Prime Minister to instruct the Civil Aviation Ministry to withdraw a notice to workers to vacate their quarters within six months. They said the Air India management is dealing with the employees in a “use and throw away” manner.

Published on October 19, 2021

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