Did KFA and Air India Failure Teach Govt any Lesson?

Government to Hamper the Sector

Rather helping the aviation industry, the government is keener on hampering the same. It is planning to use the Aircraft Acquisition Committee—which vets aircraft acquisitions—to impose more rigid norms on the kind of aero planes companies propose to buy, the Economic Times reports. The newspaper quoted the Civil Aviation Minister as saying “the government will be stricter from now on when it gives a go-ahead to any airline to buy an aircraft. We would want an airline to give us a firm business plan. In the past the number of aircrafts that have been booked by airlines far exceed the capacity needed and that might become a problem.”

Why should the government know what kind of aircraft an airline plans to buy? The airline that could offer such a guarantee was Air India, which however wrecked due to its overambitious purchases of Boeing Dreamliners. And it is now on the track of a bailout.

The government is directing future business failures for the aviation industry in advance. By not allowing the failing airlines like KFA or Air India to die, the government is actually creating hurdles for the future airline firms to achieve success by micro-managing their business decisions.