Air India has been the butt of many jokes for years – it is frequently used as the ultimate example of what a state airline becomes. This role was ensured after Greece’s Olympic went bust. Only Alitalia comes close among industry analysts when it comes to airline jokes. South African is in a race to join the big league though.
Privatizing state airlines is never easy. State companies are inevitably places where the state politicians create jobs for their supporters. When the axe falls these people, whose primary skill is political connections, are the first to go. They really do not contribute much. When BA was privatized the first move was firing 22,000 people. Air India may need to fire more than that number.
won’t be easy. It was tried before in 2001. India has an amazing state bureaucracy – privatization will cut deeply into this culture. One of the most commonly cited numbers is the number of people employed by Air India. The connection between these numbers and state ownership is well described here. With 27,000 employees per aircraft anyone can understand that there is a very big problem. A more recent story describes that airline as having a far better ratio. But note the more recent data “excludes Air India’s engineering and ground handling subsidiaries.” So this, of course, makes the improvement doubtful. The following table illustrates how Air India compares with the big US airlines.
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