Private airlines cannot hope to survive without the prerequisite of sound professional management and financial prudence.

October has been a bone-rattling month for the airline industry with events occurring in bewildering succession. Jet Airways suddenly issued marching orders to 850 of the 1,900 employees on its list for retrenchment only to abruptly execute a volte-face ostensibly brought about by any or all of the following conjectures: a genuine change of heart on the part of the management, persuasion by the government or under threat from a new breed of political mafia. Whatever the reasons for the reinstatement, it failed to assuage the trauma of employees across the industry.

Fuelling discontent, Kingfisher announced downward revision of salaries across the board which, in the case of some, was as high as 90 per cent. Then the government revealed that Jet Airways and Kingfisher owed oil companies a whopping Rs 2,900 crore for fuel uplifted, which the airlines were not in a position to pay. Further evidence of distress came to the fore with Jet Airways and Kingfisher joining hands to coordinate rationalisation of routes and elimination of over capacity. Competitors, after all, do not collaborate unless in deep trouble. Other smaller airlines could well be facing an equally precarious predicament as airlines in India are reported to have accumulated losses to the tune of Rs 10,000 crore and many of them could be teetering on the verge of extinction.

Messy financial records apart, these grim episodes lay bare the incoherent decision-making at corporate level on issues of critical importance to the industry, raising serious doubts about the quality of professional management. Established under the public sector to not merely cater to the affluent but also serve the social diktat of providing countrywide connectivity even if routes were unprofitable, the airline industry in India has essentially been an elitist business. Earlier, airlines were run not as business enterprises but as departments of the government under bureaucratic control weighed down by afflictions of the public sector, such as inefficiency, overstaffing, low productivity and scant focus on profitability. In the wake of economic liberalisation in the early 1990s, the first experiment at privatisation ended in disaster attributable to flawed concepts and poor management. All, barring Jet Airways and Air Sahara, closed down. A decade of operations later and reeling under Rs 1,000 crore in losses, Air Sahara was up for sale.