Privatized Air India's takeoff can lead other PSUs to thrive as well

The ideal path ahead would be the 'corporatization' of PSUs by gradually offloading state-held equity into our stock market

- ANIL AGARWAL

A little over a year ago, Air India was a chronically sick and loss-making public sector undertaking (PSU). It cost the taxpayer around $1 billion a year to keep the state-run airline's aircraft flying. Then in January 2022, Air India was finally privatized when the Indian government sold 100% of the company along with its subsidiary Air India Express to the Tata Group. About a year later, the airline placed the biggest order of aircraft in India's aviation history. There could not be a better example for how privatization works and delivers positive outcomes in short span of time.

Given the global airline industry average of 150 employees per aircraft, Air India's order of 470 new aircraft will create around 70,000 direct jobs.

These will be jobs at different levels of skills, from managers and pilots to cabin crew and ground support staff. And then, there will be hundreds of thousands of indirect jobs, as associated sectors like airports and tourism get a boost. Air travellers are expected to benefit from newer routes, more competition on existing routes, cheaper fares and better overall service. News reports have lately begun to hint that rival airlines may place orders of more than 1,000 aircraft in the near future.

From being an objection of derision-because of flight delays, cancellations and poor service-Air India is likely to once again become a carrier of the country's pride internationally. The presidents of the US and France, the home countries of Boeing and Airbus, which bagged the airline's aircraft orders, joined Indian Prime Minister Narendra Modi to celebrate the announcement.