The government's decision to allow private airlines to operate in the Saarc countries may have cheered up private operators, which until now accused the Centre of favouring state carriers, but it has left national carriers Air-India and Indian Airlines sulking and demanding a level playing field.

Sources in A-I and IA told Business Standard that both carriers are often under-rated compared with the private operators in terms of product and services, one fails to realise that the national carriers are burdened with social obligations.

Air-India: Of divestment and other issues

"There is a 49.5 per cent reservation for scheduled caste/scheduled tribe and other backward class as employment criteria. This is a root cause for inefficiency and the product quality suffers. Private airlines, unlike government carriers, hire employees on basis of merit and are on contract terms," sources said.

Also, besides the parliamentary consultative committee, which keep the airline's CEO and top executive level busy, the government officials are subjected to scrutiny by Comptroller & Auditor General and Central Vigilance Commission.

"This leave little room for strategising and freedom in terms of decision making and implementation which essentially is the prime job of the airline's top executive level. Moreover, for a simple expansion plan, the airline has to go through complex approval procedures, while private airlines sign aircraft acquisition deals in air-shows and exhibitions," sources added.

The long pending aircraft acquisition plans of A-I and IA is yet to see the light of the day. The mode of financing the over Rs 20,000 crore (Rs 200 billion) fleet acquisition plans are yet to be finalised.