Bailing out the king?

By now, you must have all heard and read about the fiasco with a big Indian airline owned by one of the most ‘enigmatic’ businessmen in the country. Chances are that by the time you read this, the whole thing would be dead and buried. And its planes would be flying again with those lovely airhostesses, which he does not fail to tell you a few times, that he has ‘personally’ selected.
To be clear, I neither have the domain expertise nor the consolidated view of the sectors that policymakers enjoy. Hence, any solution I serve up to this mess would hold little significance in boardroom discussions, which I am sure of. Even so, I do have my own little opinion about the airline boss expecting a government bailout and asking banks to take a haircut, at a time when most of them are under intense pressure with broader economic factors.
First up, why would man so much in distress still be up to all the usual when all is not usual with his business? Let’s step back and take a look – our man has a F1 team, an IPL team, a yacht or two, a sprawling holiday estate in Goa (there maybe others, we know), a bevy of beauties and photographers flying off for a calendar, a TV channel or at least branding on one, and tons of real estate everywhere.
Take your own haircut first, sir. Sell some of those cars and some of that real estate if you are really awake to the impact of your airline failing. Cut down all that vanity spend and pay your dues. But first, pay your employees. I am sure an open letter or two are on their way if you’re still studding your way through this.
I also have an issue with the whole thought process about a bailout, and why not giving one will put Indian aviation in a mess. It won’t. If the airline fails, then so be it. The government has no business interfering in a free market, where you place your bets, work hard, hope for a little luck, but if you don’t make it, you cut your losses and run or are usurped by the better competition. Eight airlines in India have packed up since the 90s. Some like Paramount Airways were wound up not more than a couple of years ago. Aviation survived all through. Those planes will fly again under a different banner. We will still fly. The Indian economic engine that is spurring airline travel is just too strong.
Lastly, I just don’t know why a thought for a taxpayer’s bailout exists for a fat, unprofitable, over expanded airline for whom conditions were made ideal by a certain civil aviation minister, but not for the state-owned airline that was profitable until it was messed about by him to make conditions ideal for others.

AUGUST SHARK is a once-failed, second-time successful bootstrapper who resides in Mumbai. He can be contacted at august@stumpspeak.com.

Tags:
Airlines, August Shark