Private airlines in India have called a strike on August 18 because they are running up huge losses and cannot continue to function. Airline fuel is heavily taxed, upto 30% in some states as opposed to 4% elsewhere in the world. In the past when the sarkari Indian Airlines was the only option it was cheaper to fly to Bangkok or Hong Kong than from Delhi to Kerala. Private airlines introduced competition and brought down costs by decreasing aircraft turnaround time. Now the filthy hand of the government came to play. Even if airlines sold tickets cheaply, say at Rs. 100, the tax was calculated at the original price of the ticket so the customer ended up paying Rs.2000. Add another Rs. 400 as airport improvement tax and air travel becomes much more expensive than first class train fare so forcing people to travel by train. This meant that first class passengers could be fleeced to subsidise second class travel. Of course, the politicians claimed it was all for the aam aadmi but it only allows politicians to run trains to their localities at huge losses only to gain votes. The great news is that the Air India-Indian Airlines combine has losses of around Rs. 40 billion because of overmanning, unnecessarily high salaries and pure thieving. So now it is a question of allowing Air India to fail or reduce taxes and allow all airlines to flourish. With fiscal deficit out of control it may be difficult to throw taxpayer money at the corrupt airline. Is it possible that corruption at many levels can produce a good result?