I came across this somewhat strange news recently and immediately felt like discussing it with you guys.
The Finance Ministry has made it mandatory for all government officials to fly on Air India (AI) while going out for an official work. This condition is valid both for domestic as well as international visits. And also if the destination is not connected by AI, they have to use the AI service till the closest city (that is connected) to the destination, and then use a different flight. But that different flight should preferably be the one having tie-up with AI.
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In light of the fact that AI which integrated with Indian Airlines, is going through a combined loss of over 7000 Crore and also has a huge debt liability for purchasing new planes, the step taken by government seems to be justified and essential. It had been looking since long for measures to revive its commercial flight operations and this one seems to be going in that direction. In the future, further measures may include a bailout sum from the government.
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And here we are the management students, most of us who may think such a step to be an unfair trade and marketing decision. It directly will affect the business of the private players in Civil Aviation (To prove this, we need statistics of the number of government employees flying every year—if someone can find that, it will be great). Just because government is a regulatory authority does not mean it goes against the morals of Perfect competition. It is something like: A person working at Microsoft cannot keep a Mac.
Now I leave the topic open and hope we come out with a lot more facts related to the matter and also your personal views and opinions.
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Nice topic to be left open for discussion..
ReplyDeletei feel that this is completly ridiculas..because:
1>This will go against the spirit of Comptition
2>AI being a PSU can get such offers but when many airliners are bleeding heavily, why aren't they given such preferences. The same attitude is with Pvt Sectors Banks..PSU Banks will get moneyy from Govt to run but Pvt sector banks will be told to merge with someone else..
3>Won't it increase the financial burden of GOI. When a direct and cheaper flight is available to a destination, why spend more and that too for an airport away from destination?
GOd help us all..this is how taxpayers money is misused and then the Govy cries foul about increasing fiscal deficit..
I'm completely for the idea of the airlines ministry making it mandatory for govt officials to fly on AI, the very next thought that atleast AI would have someone as their passengers and they need not fly empty makes me happy, atleast there would be someone to fly along with,,as the pilots and crew are also social people how long can they see empty seats and how long will the cabin crew only smile to the pilots... they badly need passengers, i feel this as a strategic move by AI.....much beyond the understanding of Management gurus///
ReplyDeleteI think once again the govt has taken the right decision....JAI HO !!!!
@ sundeep nice article man,,,,keepp writing....\m/
Govt officials must travel with AI, since it is paid by govt. Its obvious the earnings from one deptt must to the subsidiary which is struggling for existance. If AI makes annual losses, it is this govt. who has to pay for it. Then why not to pay in a way which will not only establish AI, but also will bring revenues in direct way. As other private airlines will only be paying the taxes to the govt. but AI is giving them straight revenues.
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