The final countdown

As the festival season approaches, India and its aviation sector is on tenterhooks for more than one reason. The much-anticipated third wave — Indian Council of Medical Research’s Samiran Panda stuck his neck out to say that it may come in end-August — may be a damp squib but if it does indeed hit, it is the airlines, tourism and hospitality sectors that will bear the severest brunt.

But September is also awaited as it may finally bring down the curtains on the never-ending Air India saga. The government expects financial bids by mid-September from the two shortlisted bidders: The Tata group and a consortium of investors led by Ajay Singh, ostensibly with a $1-billion war chest.

So, let me summarise what I could glean is going on. Teams from the Tata (AirAsia India chief Sunil Bhaskaran has been spotted!) have been at Air India’s offices interacting with virtually every department on a daily basis, opening cupboards from which skeletons would invariably be falling out. Directors, senior management and several Air India staffers confirmed that the Tata’s were very much on it, although no one could confirm that any team representing the Ajay Singh stable had visited as yet. Rumours, however, continued to float that he’s coming next.

Within the airline, mixed emotions rule. There is a section of employees who just want the airline sold, their salaries restored to pre-pandemic levels (cuts are up to 60 per cent for certain categories) and for life to return to normal. Pilots and crew, in particular, have taken a sharp hit as variable allowances have been reduced too. So lower flying hours and a lower rate per flying hour have compounded their woes. But barring some unfit, overweight or lazy exceptions, pilots and crew seem mostly eager to see the carrier change hands. They’re confident that the airline can’t operate without them, no matter who’s in the cockpit.

Ground level and office administrative staff remain more wary as do those in senior and top management. Many in this category are primarily responsible for where the airline finds itself today and suspect their days are numbered. A fairly significant number in this category was recruited for reasons other than merit over the years and the kith and kin of staffers have consequently prospered. This is about to change. There is also an older section of employees who view the developments more from their heart than anything else. Air India for them is an emotional anchor, more a way of life than an employer. This lot will suffer some heartbreak.

For the Tatas — stuck with it for better or worse — the due diligence and interaction with departments  are more of a formality. A former Tata board member told me — and he wasn’t joking — that they are “happy to take on this crazy burden, albeit for free”. My heart in a way goes out to them in this “die if you do and die if you don’t” scenario. If they don’t take on this behemoth, their chances of succeeding with Vistara and AirAsia India shrink. If they do take it on, nobody including insiders are confident that they can pull it off. The lack of management depth and sector expertise has already been amply demonstrated by the two airlines in their stable. 

The fact that Mr Singh’s team seems largely missing-in-action has in the meanwhile lent more credence to the “smokescreen” theory dogging his intentions from the start. The body of sceptics on whether Mr Singh is genuinely keen to buy the airline or simply a mirage to ensure the sale meets government norms is growing. I am not at all convinced Mr Singh would be suicidal enough to buy an airline — any airline — in the pandemic when the post-crisis structure of the industry is far from clear. Moreover, he has enough worries on his plate with SpiceJet. If indeed he intends to put in $300-million or any amount from whichever sources, it should be added to bolster Spicejet’s coffers. Isn’t that what a government keen to protect small shareholders should be insisting on too? Isn’t it in the country's interest to have well-funded, healthier carriers? It defies all logic.

From all accounts, it is clear the sale, like demonetisation, promises to remain shrouded in secrecy. The administrative ministry — ministry of civil aviation — prone to leaks is privy to very little. The PMO is leading this charge with disinvestment officials as sepoys. A senior commander argues that a combination of desperation and ego is driving this sale, rather than sheer determination. The show over the next few weeks promises drama and intrigue till the bitter or happy end.