What is the trouble with Air India and who is the trouble-maker?

In the wake of these exposures, the government is now talking of revival of Air India. On the other hand, the capitalist associations are demanding its immediate privatization. They are saying government must not inject any money in Air India as it is allegedly a waste.

The workers of Air India have been waging a powerful struggle against the liquidation and privatization of Air India.

The different sections of Air India workers — pilots, cabin crew, ground handling staff, engineering staff have consistently exposed how the current CMD of Air India Arvind Jadav, and the Civil Aviation Ministry under the UPA-1 and UPA-2 governments, have carried out systematic sabotage of Air India with the aim of converting a profit making company into a loss making one. They have exposed how it is being liquidated and privatised bit by bit as a prelude to its complete privatization.

In the wake of these exposures, the government is now talking of revival of Air India. On the other hand, the capitalist associations are demanding its immediate privatization. They are saying government must not inject any money in Air India as it is allegedly a waste.

Union Civil Aviation Minister Vyalar Ravi held a meeting on July 6, 2011, with representatives of the Indian Commercial Pilots Association (ICPA), as well as the unions of the cabin crew, engineers and maintenance staff, ground handling staff, Commercial department workers, etc. According to the circular issued on the meeting by the ICPA, the Minister assured the leaders that the government and Prime Minister Mannohan Singh are very serious about reviving the company. He said a Group of Ministers meeting on Air India this week is expected to approve an injection of Rs 1,200 crores, as well as payment of another Rs 1,200 crores which the government owes to Air India, for flights requisitioned by the government. He also reportedly assured the leaders that the Maintenance and Repair Overhaul department would not be liquidated or privatized, as is widely feared by the engineers.

The first question is this — is the government serious about ensuring Air India is turned around? If it were, then it must first answer why the cumulative loss of Air India has risen from 475 crores to 60,000 crores over the past three years. It must answer why the market share of Air India, which was the largest three years ago, has dropped, and the total number of people flying by this airline has actually reduced, while overall passenger traffic by air has increased.

The purchase of Boeing 777 and 787 Dreamliners far beyond the airlines need is a major factor in this. There has been enormous wasteful expenditure in the company authorized by Jadav, including repainting of the planes thrice over with changed insignias. Lucrative routes have been deliberately handed over to private Indian and foreign competitors.  Private airlines have been deliberately given preferential time slots. The profit making  ground handling department has been handed over to the Singapore Company SATS. Deliberately, the pilots, cabin crew, as well as other workers are kept idle, as also the planes. Furthermore, through leaks in the corporate media over the past few years, both Arvind Jadav and Civil Aviation Ministry officials have declared that privatization is the only option, and the only question is how and when.

If the government were serious about reviving Air India, it would immediately pursue the course the Air India workers are demanding — reverse preferential treatment to private airlines, Indian and foreign, and greatly increasing the flying hours and destinations of the Airlines, so that its unused skilled labour as well as airplanes can be fully utilized. Furthermore, those responsible for the present situation must be brought to book, including the present CMD Arvind Jadav, who all workers believe was deliberately appointed to oversee the liquidation and privatization of Air India. (Arvind Jadav is also known as a man of Boeing, as the Raadia tapes have indicated)

There are no indications that the government is willing to reverse its course. In the absence of this, the injection of a small amount of funds now and then, means the government is playing for time, and waiting for an opportune moment to privatise.

Who is pushing for privatization and why?

The Airlines industry in India has been an extremely fast growing sector of the economy in the past 15 years. Air India has by far the largest fleet strength, compared to the private competitors, and it has enormous fixed assets, including highly priced land and properties, in India as well as in major cities of the world. Just the fixed assets of Air India will more than cover all the accumulated losses. Air India has a brand name which is recognized worldwide.

In such conditions, many players in India and abroad are eyeing taking over Air India. There is fierce dogfight amongst Indian capitalist groups to take over Air India and its assets. Ratan Tata is interested in it. So are the owners of Kingfisher, Jet and so on. International players including Singapore Airlines and Lufthansa are reportedly in the hunt. Lufthansa CEO Carsten Spohr has called for the privatization of Air India. The Secretary General of FICCI, Rajiv Kumar, has issued a strident call for the privatization of Air India in the Hindu of July 9, 2011. He is doing so on behalf of definite interests. Thus various Indian and foreign players are interested in gobbling up Air India after the government deliberately under rates its value, so that they can buy it cheap.

FICCI Chief's arguments for privatisation

The arguments offered by the FICCI Secretary General for privatization of Air India need to be understood and countered.

The FICCI chief has stated that "Its net worth, despite repeated capital infusion by the government, was negative". (According to the Air India management, the accumulated losses of Air India have gone up from Rs. 475 crores to Rs. 60,000 crores in the last 3 years.) The FICCCI chief is resorting to disinformation. Air India has being contributing to the government exchequer over the decades, just like other PSU's. It is not true that the government has been pumping in money into the company as an endless pit. The financing of the Boeings bought in these three years have been through bank loans at high interest. The FICCI chief has not explained how privatization of Air India would turn it from a company whose "net worth is negative" into a profit making enterprise. The reality is that the net worth of Air India is far from negative. As earlier pointed out, just the lands and properties of Air India, if sold in the market, would get it out of its financial crisis for several years. If its fleet strength and skilled labour was fully utilized, it could increase its market share enormously. It is precisely this that private Indian and foreign capitalists are eyeing. They want the government to deliberately undervalue Air India, buy it up cheap, and make huge profits. 

The FICCI chief argues that Air India does not cater to "some strategic needs". He says it does not "provide a public service to the under-privileged".

These same capitalists who are votaries of privatization have sought and got bail-out from the government on numerous occasions, including in the recent crisis. Were they bailed out because they were serving any "strategic needs"? Were they providing "a public service to the under-privileged"? No. The government simply declared that what was good for the capitalists was good for the country.

When Air India was nationalized in the years immediately after independence, it indeed was serving an extremely small section of society—the biggest capitalists, the ministers, and officials. It is in recent decades that Air transport within the country, and between India and other countries, has greatly increased. Now between 10 and 20 crore Indians have to use airways every year, and in fact, the size of our country demands a massive increase in cheap air travel all across the country. Large sections of the people using air travel are workers. Furthermore, there are many regions of our country which need even more air connectivity, at affordable costs, such as the North East, Odisha, etc. All this can be achieved only if the problem is viewed not from the narrow prism of maximum profits, as the FICCI chief is doing, but from the point of the general interests of society..

The FICCI chief advocates that private airlines should be paid money from a separate pool created by the government to ensure that commercially non viable destinations are serviced. He wants another pool created so that private carriers can do rescue and relief operations when people are stranded abroad. In other words, he is proposing that the cost of "strategic needs" and "public services", i.e. the loss making operations should be borne by the people, while the profit making departments should be handed over to private parties!  

As long as Air India exists, other private airlines cannot "rationalize" their workforces and become "globally competitive"!  The FICCI chief says this in so many words.  In other words, Air India is setting the standard in the industry and only if this standard is broken, can other airlines increase fares, intensify the exploitation of the workforce, and increase their profits, and establish their monopoly.

The workers of Air India have been repeatedly opposing these moves to liquidate the company and privatise it. They have been struggling to bring out the truth about the developments in Air India before the people of this country. For this they have been made the target of vicious persecution and victimization (SEE BOX 3), which clearly indicates the real aim of the government. 

The resolute struggle of the workers of Air India against these attempts of the government to liquidate and privatise it is thus a struggle that deserves the support of the entire working class of our country.

Step by step liquidation and privatization

  • Allowing private Indian players to enter the industry, first within India, and then on international routes.
  • Appointing as CMD Arvind Jadav with the specific instruction to supervise the last rites of Air India through well thought out moves.
  • Deliberately creating an atmosphere of crisis, to lower the morale of the workers, and to create public opinion for privatization of Air India.
  • The order for 68 Boeing 777 and 787 Dream liners, when the requirement was only 24. This has put Air India deeply into the red.  The highest authorities in the government and the Congress Party had a direct interest in this deal, which rescuedBoeing from a crisis, and put Air India into a crisis.  
  • The discontinuation of 32 profitable routes. This has enabled private Indian and foreign competitors to eat into Air India's market share.
  • Giving the best timing slots to private airlines.
  • Making the State run oil companies stop giving aviation fuel to Air India, because of non payments of dues.
  • Making the PSU banks charge exorbitant rates of interest on the borrowings of Air India, as compared to the borrowings of other airlines, under the excuse that financial viability of Air India is in doubt.
  • While Kingfisher airlines owned by the Mallyas has been bailed out with loans infused by SBI and other PSU Banks, no such move by the government regarding Air India.
  • Deliberate under utilization of its large fleet strength, and its huge and skilled labour force, under various excuses, to assist competitors, and to create the impression that the problem with Air India is because it has "excess workforce".
  • Allowing foreign airlines to fly into and out of India on various international routes while giving up its rights of operating on these same routes in exchange, despite its unutilized fleet strength, and its skilled under-utilized workforce.
  • Not paying pilots their wages. For example, the ICPA had to write to the management as well as the Ministry a few days ago, that they had not been paid their wages for June. They have also not been paid their flying allowances for April and May. For readers who are not aware, it must be explained that flying allowances of pilots constitute approximately 80% of their earnings.


What are the actual portions already privatized, and about to be privatized?

  • Five airports have already been privatized. These include Delhi, Mumbai, Bangaluru, Hyderabad and Kochi. These 5 are amongst the most profitable airports in India, both for within India and for international traffic. These privatizations have greatly affected the revenues of the Airports Authority of India.
  • In the course of Mumbai airport privatization, the government and AI CMD Jadav gave highly priced land belonging to Air India, free to the private parties. The market price of land in Mumbai given to MIAL is thousands of crores of rupees
  • Air India has handed over the ground handling department to a Singapore Company, Singapore Airport Terminal Services (SATS). The process began in 2008 with a joint venture floated with SATS to take over ground handling in Hyderabad and Bangaluru. In April 2010, this was further stepped up, to ensure that SATS is provided preferred opportunity to take over ground handling in the most lucrative and busiest airports, Delhi and Mumbai, as also others.
  • The transfer of ground handling to SATS has meant a loss to Air India. Ground handling staff of India serviced not only Air India flights, but also various international flights, like Singapore Airlines, British Airways, Emirates, and many others, earning profits for Air India. Ground handling also had its own infrastructure. This included powering planes for start up in Bangalore, Hyderabad, and other airports where planes rest for the night. The ladders, petrol pumps, vehicles, steps, repairing machines, vehicles and many other infrastructural equipment now remain idle. In the deal with SATS, the government has not only got rid of a profit making branch, it has now forced Air India to pay for ground handling to the Singapore Company —including for power start in Hyderabad, Bangaluru and other airports. The fixed assets of Air India are being allowed to rot.
  • The workers of the ground handling department are in a delicate situation. Formally they are workers of Air India, paid by the Company. But they have to report for duty to a private management, SATS, which does not give them work. They know, from the experience of privatization of the Delhi and Mumbai Airports, that this is just one more nail in their coffin, and that of Air India.
  • The workers of the Commercial Department are also now being asked to report to SATS.
  • At the present time, about 15,000 of the workers of Air India are in limbo. They have been transferred to SATS.
  • Maintenance and Repair Overhaul department is an important target of attack. Even though the minister has for now declared that the MRO will not be privatized, from the discussion in the monopoly media, it is clear that this remains a target.
  • In 2010, a senior government official in the ministry had confided that the best way to privatise Air India was step by step, by handing over obviously profit making departments to private players. So the losses of Air India would appear to multiply, and the calls for privatization would increase. This would create a better atmosphere for privatization. This report was published in a prominent newspaper, Indian Express, in April 2010. No minister or official has refuted it. 


Glaring instances of victimization – for defending Air India

  • Immediately after the crash in Mangaluru in summer 2010, the engineers, cabin crew, and ground handling staff went on a flash strike. The immediate cause was that the government through its CMD got a private engineer to certify the rescue plane from Bangaluru to Mangaluru. This when engineers of Air India fly to all corners of the world to check and certify fitness of Air India planes. The practice of private certification of Air India planes had begun earlier.
  • Certification, as AI Engineers have pointed out, is not a question of a signature. It means knowing the particular machine, as all workers know. The engineers wanted to ensure that the lives of passengers were not endangered for petty reasons.   
  • Several activists were suspended or terminated after the strike. These included cabin crew, ground staff, as well as engineers.
  • All suspensions and dismissals were under Section 13 A, which the workers term a colonial act that has no parallel in management-worker agreements in developed capitalist countries. It allows the management/government to simply attack the workers, without an inquiry assuming they are mentally sick, or committed a crime, or incapable of work .
  • The Chennai High Court, in a ruling in early July 2011, has questioned Arvind Jadav's decision in response to a case filed by an engineer, whose services have been terminated.  It has questioned the validity of 13-A in the contract between workers and the management. The engineer concerned has said that as the Chennai office bearer of the union, he was duty bound to go on flash strike, once the call was given by his union. The Union Government has said nothing about this victimization, except vacuous promises by the Civil Aviation minister that there will be no victimization.
  • Two cabin crew members were issued pre-dated suspension/dismissal notices two days after the strike had ended, although during those two days they had worked on flights. This was a clear case of victimization.



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One comment

  1. Very enlightening report! The
    Very enlightening report! The people of our country need to understand the bigger game and really act and support the brothers and sisters working with Air India, except of course the “Boeing man- Jadhav” who is trying to sell our national carrier.
    But what I don’t understand is, if this is privatized, then who will buy those Boeings out of our taxes?

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