Who is the big Winner? – Mallya – running away has impacted Rs 9,000 crore from public sector banks, but Air India has swallowed Rs 30,000 crore of tax payers money.
“What is the difference between Vijay Mallya who lost Rs 10,000 crore and Air India which lost Rs 30,000 crore? Bank money is lost in case of KFA, and public taxpayer’s money is lost in AI’s case,” asks Mohandas Pai, former Chief Financial Officer and HR Head of Infosys.
The only difference – Air India has a forgiving promoter – government of India who stood by the company despite the atrocious decisions taken by its management and those responsible for its growth and wellbeing. But for the government, who kept on pumping in good money after bad, Air India would have crash landed ahead of Kingfisher.
Former Air India executive director Jitender Bhargava in his tell-all book ‘The Descent of Air India’ has revealed how the airline went was brought to its knees. These include several bilateral agreements that went wrong; the shutdown of profitable routes of the airline and giving them away to other airlines and aircraft bought at high prices and sold off at junk prices.
Mallya’s running away has impacted Rs 9,000 crore from public sector banks, but Air India has swallowed Rs 30,000 crore of tax payers money and continues to do so with the present government too showing no signs of exiting the airline.
The interesting fact is, Air India which needs taxpayer’s money to remain airborne, despite its gross inefficiencies. Finance Ministers will be forced to provide money every year to avoid bad press and protect misplaced national interest.