How to revive Air India? Anand Mahindra has a 5-point solution
Air India is burdened with massive debt and huge number of employees and there are a number of other problems that ensured the airliner remained a loss-making unit.
The government's bid to sell off Air India has fallen through as no one came forward to buy it. The Maharaja is burdened with massive debt and huge number of employees and there are a number of other problems that ensured the airliner remained a loss-making unit. According to the Ministry of Civil Aviation, "no response" was received from any quarter offering to buy Air India till 5 p.m. on Thursday which was the extended submission deadline for the 'Expression of Interest'(EOI) bids under the divestment process. Now, with the Centre scrambling to find solutions, a helping hand has emerged from a surprising quarter. Anand Mahindra, Executive Chairman, Mahindra Group has taken to twitter and laid out a clear-cut plan to revive cash-strapped Air India.
Here is Mahindra's solution to ensure Air India's divestment happens successfully.
Mahindra tweeted on Friday that Air India’s stake sale was a matter of "national pride now" and it is high time to "turn the crisis into an opportunity". Following are the steps that he laid down:
1) Resolve that a sale will be made, but only after a turnaround
2) Locate and appoint a government official with the potential and passion of an E. Sreedharan as Chairman & CEO.
3) Provide FULL autonomy to the Chairman & CEO with a target horizon for a turnaround.
4) Provide the Chairman complete insulation from political pressure.
5) Provide full moral support to the Chairman for all tough measures that will be required.
However, even Mahindra is not courageous enough to take Air India on board, as he himself confessed last year.
“I see myself as a generally courageous person,” tweeted Anand Mahindra, a tycoon, when asked last year if he’d be interested. “But I confess...I don’t possess THAT much courage.”
What divestment process involves:
The Central government owns 100 per cent equity of Air India. In turn, the airline holds full stake in Air India Express, while it holds 50 per cent stake in the joint venture AISATS.
Accordingly, it has been planned to divest 76 per cent government stake in AI, 100 per cent in AIXL and 50 per cent in AISATS.
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