“Air India- A Case of Deliberate Destruction of India’s National Carrier in favour of private operators and finally selling it at a throw away price”

Meeting organised by AIFAP on 17th October 2021

The All India Forum Against Privatisation (AIFAP) organised an important national meeting on October 17, 2021 about the recent sale of Air India to the Tatas. Various speakers established that the deafening propaganda in the mainstream media by spokesmen of the government glorifying this sale was totally false. Over the past many years, the national carrier had been deliberately destroyed and finally handed over to the Tatas for peanuts. This was totally against the interests, not only of workers, but of the Indian people at large.


The All India Forum Against Privatisation (AIFAP) organised an important national meeting on October 17, 2021 about the recent sale of Air India to the Tatas. Various speakers established that the deafening propaganda in the mainstream media by spokesmen of the government glorifying this sale was totally false. Over the past many years, the national carrier had been deliberately destroyed and finally handed over to the Tatas for peanuts. This was totally against the interests, not only of workers, but of the Indian people at large.

On behalf of AIFAP, Dr. A. Mathew welcomed the leaders of the various unions of Air India, who were the invited speakers. These were Shri S. N. Bhatt, President, Air India Aircraft Engineers Association (AIAEA), Shri K. Ashok Rao, Chief patron, National Confederation of Officers Associations (NCOA), Shri J. B. Kadian, General Secretary, Air Corporation Employees Union (ACEU), Shri Vilas Giridhar, General Secretary, All India Service Engineers Association (AISEA), Shri R. A. B. Mani, General Secretary, Air India Employees Union (AIEU), Shri K. V. J. Rao, Aviation Expert and former General Secretary, Air India Cabin Crew Association and Shri P. R. Ravinder, General Secretary, Aviation Managers Association of Air India.

He also welcomed leaders of unions of other sectors and people’s organisations who were attending the webinar. These were,

Electricity Sector
Shri Dipak Kumar Saha, Joint Convenor, Coordination Committee of Electricity Employees, Engineers and Pensioners, Assam Electricity Board.
Shri Ramalinga Reddy Bandi, All India Federation of Electricity Employees, Andhra Pradesh
Shri Madhav Chilke, Maharashtra State Electricity Employees and Engineers Association

Railway sector
Shri K. C. James, Joint Secretary General, All India Loco Running Staff Association (AILRSA)
Shri S. P. Singh, General Secretary, All India Guards Council (AIGC)
Shri R. Elangovan, Vice President, Dakshin Railway Employees Union (DREU)
Shri Sanjay Pandhi, President, Indian Railway Loco Running Staff Organisation,
Shri Pradeep Kumar Vishwakarma, Media Spokesman, Men’s Congress, Diesel Loco Works (MCDLW), Varanasi,
Shri P. S. Sesodia, Director, Education and Vice President, Uttariya Rail Mazdoor Union (URMU)
Shri Ratnesh Kumar, Central Working Committee member, All India Guards Council (AIGC)
Shri A. K. Srivastava, Zonal Secretary, Western Railway, All India Railway Employees Confederation (AIREC)
Shri Kameshwar Rao, Zonal President, South Central Railway, All India Railway Employees Confederation (AIREC)
Shri Nirmal Mukherjee, ex General Secretary, Chittaranjan Loco Works Labour Union, Chittaranjan Loco Works, Asansol, West Bengal.
Shri S. K. Kulshreshtha, ex Central Vice President, All India Railway Employees Confederation (AIREC),
Shri Rabi Sen, Indian Railway Employees Confederation
Shri Pranav Kumar, Working President, Mumbai Division, All India Rail Track Maintainers Union (AIRTU).

Air India
Shri C. D. Soman, ex General Secretary, Air Corporation Employees Union (ACEU)
Shri R. Ramanathan, ex General Secretary, Air Corporation Employees Union (ACEU)

Port & Docks
Shri V. V. Satyanarayana, Joint Secretary, Hind Mazdoor Sabha and Vishakhapatnam Port Employees.

Telecom Sector
Shri K. Natarajan, Circle Secretary, Tamil Nadu, National Federation of Telecom Employees.
Shri Padmanabha Rao, Assistant General Secretary, Sanchar Nigam Executives Association (SNEA), BSNL.
Shri V.A.N. Namboodiri, ex General Secretary, BSNL Employees Union (BSNLEU)

Steel Sector
Shri Ajit Kumar Pradhan, General Secretary, Nilanchal Executives Association (NEA), Nilanchal Ispat Nigam Limited, Odisha.

Petroleum Sector
Shri Kishore Nair, General Secretary & Stanny Monteiro, Bharat Petroleum Technical and Non-Technical Staff Association, Mumbai Refinery.
Shri K. N. Satyanarayan, General Secretary, Hindustan Petroleum Employees Union, Vishakhapatnam Refinery, Andhra Pradesh.

Shri Ashok Kutty, All India Defence Employees Federation (AIDEF)

Other Organisations
Shrimati Sanjeewani Jain, National Vice President, Lok Raj Sangathan (LRS)
Shri Anil Kumar, Organising Secretary, National Confederation of Officers Associations (NCOA)
Shri K. M. Kumar Mangalam, Co Convenor, Committee of Public Sector Trade Unions of Andhra Pradesh.
Shri Janmula Raghava Rao, General Secretary, Committee of Public Sector Trade Unions of Hyderabad.
Shri Vidhayadhar Date (Chairman) and Shri Antony Samy, Amchi Mumbai Amchi BEST (AMAB), Mumbai

The initiating presentation by Com Ashok Kumar of the Kamgar Ekta Committee was appreciated by all the speakers. The highlights of the speech are given in the box at the end.

Shri S. N. Bhatt, President, Air India Aircraft Engineers Association, declared that we are not illiterate and that the value of Air India is much more than Rs. 3000 crore. We should have stopped the privatisation long back and it was our mistake that we kept quiet and did not agitate at Jantar Mantar earlier, otherwise the masses would have come ahead too. But what should we do now at this stage? We have written multiple letters to the PM and other ministers opposing the privatisation of Air India but all in vain. He pointed out that AI has more than 18,000 permanent and contract employees and the issue was how to protect their interests, their livelihood, their housing. This airline belongs to the people and its workers and not to some capitalists. The merger of both the airlines was not good. The debt burden will have to be handled by the common people of this country. He appealed for guidance for further steps and stressed the need for all the participants to plan a further course of action together.

Shri K. Ashok Rao, Chief Patron, National Confederation of Officers’ Associations (NCOA) started by quoting from Mirza Ghalib. He pointed out that the introduction of air taxis violated all the rules of aviation. When they pointed this out, the then Secretary of Civil Aviation had asked shamelessly how they could have known this without being told! The air taxis had to be shut down. After that Centaur Hotel of Air India was sold off for a pittance. Within a few months the buyer sold it for a tremendous profit. Mr. Rao went on to raise questions about the sale of AI. Since a single bid is not allowed, another individual who was obviously not serious was roped in.

In the future it is not the Tatas, but we, the common people who will end up paying the loan of Rs. 15000 crore. He pointed out that with this sale, the Tatas have got 2500 trained and licensed pilots without spending a paisa. The training of each pilot costs lakhs of rupees.

Shri Ashok Rao went on to point out that the case of Air India resembles that of BSNL and MTNL. Various steps were taken to wreck these companies and sell of the entire sector. In future, like in telephony, in the airline sector too, 100% FDI will be allowed. FDI is allowed in infrastructure. The entire wealth of our country is being sold off. Now Vedanta sitting in London is taking up the entire coal industry and buying off many mines and capturing many minerals. Is there any meaning in political independence without economic independence, he asked.

In the transport industry, profitable routes are sold. He lamented that nobody spoke up when Air India’s routes were sold bit by bit. He asserted that we have no choice but to unite and fight!

Shri K.B. Kadiyan, General Secretary, Air Corporation Employees Union (ACEU) said that before 1953 only private airlines were there, most of which could not run. The government appointed committee then recommended nationalisation. At that time workers as well as Jagjivan Ram had recommended only one airline, but Air India and Indian Airlines Corporation were created. The civil aviation sector was developed by these two airlines. Up to 1990 they were running very efficiently. In 1991 the Open Sky Policy was introduced and Air Taxis were allowed. As per the 1953 Act this was not allowed and hence they opposed this move, but their objections were over ruled.

Foreign airlines started operating from all lucrative cities. The Civil Aviation Minister had given the employees in writing that they would not privatise the national airlines, and yet successive governments have done all these things. The government formed the Air India and SATS joint venture company in 2010. Ground handling is the main source of income for airlines. SATS is a sick company and they were told that SATS would spend Rs. 600 crores, whereas they spent only Rs. 10 crores. Instead Air India gave its equipment to SATS by just painting it as AI-SATS.

The new airports in Delhi, Hyderabad and Bengaluru were privatised. According to the 2017-18 annual report AI has made a profit of Rs. 217 crore which was Rs.105 crore in the previous year. And yet the Minister made a statement in parliament that Air India is making losses and hence we shall sell it off! If anyone wanted to sell anything, they would say positive things about it, but the government did the opposite.

Mr. Kadiyan said that ten years ago their union was derecognised and 52 office bearers sacked and union offices were forcibly sealed because they were opposing AI-SATS.

All the workers of the company have created the massive assets of the airlines. Now the government is giving it off to the private sector. Any private capitalist has the aim of making profits. Air India used to operate 80% loss making routes. If our citizens had to be evacuated from anywhere in the world Air India would do it. Has a private airline ever done that?

So many private airlines have closed down. Why? They would take hundreds of crores of rupees as loans and run away. Some people say Tatas are different. But see how the workers of Vistara and Air Asia are treated!

He went on to add that their Charter of Demands has been due since 2007, but it has not been settled. They have been telling the management to at least merge the basic pay and DA, but they are told that the civil aviation minister is not giving permission. They must have given hundreds of interviews against privatisation but none has been aired.

Airports are being privatised one after the other. Delhi airport has three terminals. In 2010 the government decided that all airlines will shift to terminal 3. The workers requested them to give the well-functioning terminal 2 to Air India. But that was refused. Hence AI had to pay Rs. 70,000 per month as parking charges instead of Rs. 700 simply because GMR had to be favoured. GMR was to spend Rs. 12,000 crores on Delhi airport, but they have spent just Rs. 1200 crores. They will earn lakhs of crores in the next 30 years.

The labour cost in AI was 11% to 12%. But now it has come to 7%.

Air India has aircraft hospitals. The cost of servicing a plane internally is Rs. 15 crore, but they have been outsourcing it for Rs. 30 crore per plane. Air India was forced to service their planes outside even though it has the best engine hospitals and check shops in the world. On the other hand they say they do not have money to buy spare parts!

The company turnover was Rs. 7,000 crore, but 110 aircrafts were bought for Rs 50,000 crores, which meant that Air India is paying Rs. 6,000 crore just on interest. If just Rs. 10,000 crores worth aircrafts had been bought Air India would have run well without any problem.

He stressed that with the sale of Air India, an entire sector has been privatised. The disappearance of the state sector will mean that passengers will be exploited with high fares and less facilities. Internally Air India is very strong due to its employees. But it was deliberately maligned.

He concluded by saying that they hope that we will work together on one platform and fight in the interests of our workers.

Shri Vilas Giridhar, General Secretary, All India Service Engineers Association (AISEA), said that much before Air India and Indian Airlines were merged, they had met Praful Patel, the then Civil Aviation Minister, protested and narrated their many problems. But that was ignored. Even today the workers are still suffering from the problems caused by the merger. Air India and Indian Airlines were making profits and the merger was a signal given by the government to the world that now we have a huge company that can be sold. On being asked by the government, the engineering cadre had asked them to buy 24 aircraft. However after the merger, 68 were ordered, way over the budget and also the quality was very poor. They were forced to buy only Boeing aircraft. Initially the new aircraft had so many problems. The wind shields of Boeing 787 crack even now.

The delivery of the new aircraft was delayed. The unions started asking about the funds Air India received after the merger to survive and till date they don’t know what happened to the funding. At that time they had also demanded that a CBI enquiry should be held of the operations and finances of Air India. But that was not carried out. They are still demanding a CBI enquiry even now after Tata has bought it, so that management’s misdeeds will get exposed. After retirement executives used to be continued for 2-3 years saying that their services are required. Their union has opposed this also right from the beginning.

A Performance Linked Incentive (PLI) was introduced by the management. Executives sitting at home used to be paid PLI. So there are many such problems due to which Air India was drained. The workers of Air India are wrongly being blamed for this though it is they who have created this industry with their sweat and labour.

Further, after Air India and Indian Airlines were merged, later they were split into six companies! The engineering company, Air India Engineering Services, has not been sold so far but we know that we would be the first to be attacked.

There are forty thousand retired personnel who will not be taken care of by Tata. The Government of India has said that an SPV (Special Purpose Vehicle) will be formed to take care of them, but the workers do not trust them at all.

All of a sudden the management declared that the Air India provident fund trust is closed and they were told that the fund will be transferred to EPFO. We took the initiative and 14 unions together started fighting. The government broke our unity and pressurised employees to sign on the declaration to transfer funds to EPFO and the management got 51% signatures. Now the EPFO is saying that for 10 years we will not get our money. But what about the loss in EPFO due to bad investments? In all probability they will reduce the interest payable on PF and adjust the loss against that.

The residents of the airport colony are being coerced to sign an undertaking that within six months they will leave quarters. Vande Bharat was made successful by the residents staying in the colony during the pandemic, but the government is forgetting all that.

Air India Engineering Services also will be targeted since their workshops are also located on the land sold to Adani, who will start charging hefty rent and our company will not be able to operate successfully.

Let us unite and fight!

Shri Mani, General Secretary, Air India Employees Union (AIEU), agreed that they all are responsible for this today but that they have been fighting against mergers and so on. The need of this hour is for us to unite and so pointing out that our union is the biggest and so on is not going to help at this stage. The government finds its way to pull some of us out of the forum and break the unity. Air India and Indian Airlines were doing great on their own and there was no need at all for this merger. There was no need to buy so many aircrafts and burden the companies unnecessarily. When the interest was equal to revenue earned where was the question of making profits. A committee appointed by the government had also recommended that the government should write off all the loans in the name of Air India which were incurred to buy so many aircraft. If the government was really for the people, when you are allowing so many NPA’s scot free? Why can’t the loans be written off? We could have started with a clean slate with a proper management.

There was a CMD who took a decision on his own of changing the logo and it didn’t even last for 6 months. The company went back to its original logo. What was the point of spending crores of rupees on such things and then later blaming the employees for it?

Another committee chaired by Mr. Dev concluded that there is still one big question which remains unanswered – why were two loss making companies merged? Nowhere in the world is this done! We fail to understand why the government has to rely on foreign companies. It is being made out as if unless Air India is sold off, it will just shut down!

Now we do not have a national airline. So who will carry out evacuations in emergencies? Will private operators ever do it?

Shri P. R. Ravinder, General Secretary, Aviation Managers Association of Air India, declared that we need to understand how the government has slowly and steadily tricked the employees of Air India and other sectors like BPL need to learn from it. The government is using Air India as a template. Even before the sale, the employees had lost Rs. 4 lakh out of Rs. 30 lakh from their PF because of the mismanagement of the company. The selling price of the company should have been fixed before the bidding and not after that like it happened with Air India. Ajay Singh has no worth at all and hence how he gave the bid is to be questioned. It is now a capitalist airline. Railway platform tickets are being sold now for Rs. 50 each. The same will happen to airports. The National airlines were to serve the people. Now private airline will serve private interests. The government says that VRS will be given by TATA after the end of one year, but why would it? Employees will just be thrown to gallows. Similarly the withdrawal of the medical facility needs to be taken up by all unions. Railways, other public sector enterprises, farmers – all of us need to unite and give a tough fight to this government and the capitalist class!

Shri K.V.J. Rao, Aviation Expert and former General Secretary, Air India Cabin Crew Association, talked very forthrightly about the lessons that need to be drawn from the past mistakes that have been made. Others should not repeat these mistakes. He talked about how certain union leaders fell to the allures of the management. He talked about how he had fought steadfastly over the years, filed 65 criminal cases against Air India and how he was jailed for 11 days for asking uncomfortable questions. He pointed out that in the past when they had refused to operate on being denied their allowances, they had immediately been given them. He stressed that the sale of Air India is a wakeup call. We need to shed our fears. If anyone is terminated due to union activity, others have to stand up for him or her and support them. A small contribution from each member can support the livelihood of the victimised employees. This is a lesson to all unions, their leaders, their members. We have to unite and fight hard. We have nothing to lose but our shackles!

There were a large number of interventions at the end and all present agreed that it was necessary to strengthen our unity and fight against privatisation.


Highlights of the Presentation by Com. Ashok Kumar from the Kamgar Ekta Committee on deliberate destruction of Air India and price people will pay for its privatisation

The policy of globalisation through privatisation and liberalisation was launched in 1991 at the instance of Indian and foreign monopolies. The Civil Aviation sector was decontrolled in 1991 and private air taxi and charter services were allowed. In 1994 the Air Corporation Act was repealed in order to allow private airlines to provide regular services. Thus, the process of encouraging the private sector at the cost of Air India (AI) and (IAC) began and finally culminated with the sale of AI just recently in 2021. This process was carried on by various governments that came to power in these thirty years.

Air India as well as AI Express are being sold to Tata group for Rs. 18,000 crore, which amounts to a throw away price. If we subtract Rs. 15,300 crore of this which will go towards the repayment of the loan, the sale price comes to just Rs. 2,700 crore! According to their accounts, on 31st March 2020, the net assets of Air India and AI Express are over Rs. 50,000 crores. The actual value of physical assets, along with all the valuable landing and parking rights within the country and abroad, is many times more. Tatas are paying only 5% of the net book value of the assets they are acquiring.

For just Rs. 2,700 crore Tatas are getting a total of 153 aircraft, out of which 87 are on ownership basis and 66 on lease. Air India has 49 wide body aircraft and 79 narrow body ones (a total of 128) whereas Air Express has 25 narrow body aircraft. The Tata group also gets Landing and Parking slots – 4,400 domestic and 1,800 international slots at domestic airports, and 900 slots at overseas airports. These are very valuable as no new landing and parking slots are available at busy airports.

Deliberate wrecking of the national carrier has been carried out to justify the sale. The media has devoted a large amount of both space and time to publicize the government’s justification for the sale. It says that the accumulated losses of Air India amounted to Rs. 61,625 crore on 31 Aug 2021, and that it is a great mercy for India that the Tatas are taking it over. What is being hidden is that like in the case of BSNL and other companies that the greedy monopolies target, the accumulated losses are entirely due to the government’s own actions aimed at wrecking the enterprise so as to justify the takeover.

First of all, AI Express consistently made profit. In 2006 the then Congress government had forced AI to take a loan of Rs. 50,000 crore, when its revenue was just Rs. 7000 crore! It was forced to buy 68 aircraft instead of only 28 that were required. In 2005 Indian Airlines was made to order 43 aircraft, which were much above its requirement. Loans and interest payments turned both the profitable airlines into loss-making ones.

Besides this, despite strong opposition of workers of both airlines, Air India, serving the international market, and Indian Airlines, mainly serving the domestic market, with completely different type of aircrafts, market, and culture were merged. This crippled both the airlines.

In 2004-2005, the government gave away the most lucrative international routes and slots of Air India — particularly the Gulf routes — to private and foreign airlines in the name of liberalising “bilaterals”. (Bilaterals are commercial air travel agreements between two countries that give both the same right to operate a certain number of flights). In 2007, the very first year after merger, the merged company made a loss of Rs. 10,000.

AI has never recovered financially from the loan burden and consequences of merger. It lost a large part of its most lucrative Gulf market to private Indian and foreign airlines. Indian Airlines used to have over 40% of the share of domestic market before merger; it steadily came down. The weakening of Air India was meant to help private airlines which steadily grew after that.

The sale of Air India has gone through a long process carried out by various governments. The first attempt was made in 2000, but it had to be shelved due to strong opposition from the workers’ unions. In May 2017 the NITI Aayog recommends its strategic sale. In March 2018 the government invited bids for purchase of 76 percent of government shares in the airline. The private buyer was required to absorb Rs. 49,000 crores of outstanding loans.

No capitalist group showed interest in buying Air India under those terms. They did not want the government to retain any share of ownership and also wanted it to absorb bulk of the outstanding loans. The government agreed to the demands of the monopoly capitalists. In 2020 bids were invited for purchasing 100 percent of the state-owned airline, including Air India’s 100 percent shareholding in AI Express Ltd and 50 percent in Air India SATS (Airport Services Private Ltd.). The loan amount to be absorbed by the private buyer was reduced to Rs. 23,286 crores, with the rest being borne by the government.

Capitalists wanted even more concessions. In October 2020, the government changed the bidding condition by removing the requirement to absorb a pre-determined amount of loan. The bidders were asked to quote the enterprise value after considering all the liabilities. No reserve price was fixed before inviting bids. This was the worst time to sell an airline, but the most favourable for capitalists to buy it!

A reserve price of Rs. 12,906 crore was decided after receiving the bids. Only two bids were received. An individual, Ajay Singh, who is a promoter of a private airline, Spice Jet bid Rs. 15,100 crore, while the Tata group bid Rs. 18,000 crore.

What people will pay for privatisation?

Public money invested in Air India as shareholding of government was Rs. 32,665 crore. If we subtract Rs.2,700 paid by the Tata group we are left with Rs. 29,965 crore. Out of the outstanding loan of Rs. 61,652 crore, the Tata group will pay Rs. 15,300 crore. That leaves Rs. 46,262 crore of loan to be borne by the government. The government has already absorbed an amount of Rs. 29,464 crore of the loans. Thus, the total cost to the government, that is to the people of India, will be Rs. 1,05,691 crore!

People will also pay higher airfares. With the complete withdrawal of the state from civil aviation, air fares will be set solely with the aim of private profit maximisation. Social objectives such as ensuring connectivity to remote areas will not even be considered. Those places where flights are not usually full will experience a steeper rise in air ticket prices.

Private airlines have already been accused of forming cartels and engaging in monopoly pricing. In 2018, IndiGo, Jet Airways and SpiceJet were all fined by the Competition Commission of India for forming a cartel to hike up the fuel surcharge rate.

Air India workers will also pay a heavy price for privatisation. They will face greater job insecurity. The Tata group is required to retain present workers only for one year. The contract allows it to offer VRS after one year. Neither is there any assurance about their wages after one year. Workers staying in Air India Colony in Mumbai have been asked to vacate their houses within six months of private take over. They would have normally stayed in the colony right till retirement. Everyone knows how steep private housing is in Mumbai.
There have been systematic attempts made to blunt opposition to privatisation. Over the decades, the Tata image has been carefully cultivated as a good capitalist, honest capitalist, good employer, and so on. This is totally false. A capitalist cannot afford to be good by caring for workers or by always offering goods and services to people at cheap prices. He has to maximize his profits; otherwise he will simply fall behind and stop being a capitalist!

Workers have to understand that their interests are diametrically opposed to the interests of the entire capitalist class!

The privatisation of Air India will encourage capitalists and their government to accelerate the strategic sale programme of the public sector units like CEL, NINL, BPCL, LIC, SCI, etc. The Indian working class must intensify its opposition to the growing attack by building steel-like unity and mobilising people in general against privatisation.

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