Thursday, November 10, 2016

Armed With A Winning Strategy, Jayant Sinha Vows To Make Air India Profitable Again

Jayant Sinha assumed charge as Minister of State for Civil Aviation in July this year, after a stint in the Finance Ministry. The former investment banker gained a reputation of being a quick learner there and he has demonstrated that again in his new job, having acquired a good grasp over the intricacies of India’s high-cost aviation sector. He has helped launch the ambitious regional connectivity scheme UDAN (which had been in the works for years) and now promises to revolutionise service standards in the aviation sector. In an exclusive chat with Swarajya’s Sindhu Bhattacharya, Sinha promises a return of loss-laden Air India to its former glory and a new definition of what we know as an “Indian” airline. His next pet project is Air Sewa, which is expected to change service standards in India’s aviation industry. Excerpts:
Q. In the last six months, every airline was competing aggressively, especially on pricing so much so that yields were falling. But last-minute prices have shot through the roof in the last few days.

A. It is important to understand how airline pricing is done. Like any other industry, setting prices is a very dynamic process. If you look in aggregate, prices have been declining for air travel and if you look at the revenue per average seat kilometre (RASK), which is something that airlines track very closely and you can see the data from the latest numbers that Indigo has posted, those are actually coming down. So airline prices in aggregate are declining.

Q. What do you mean by aggregate pricing, for the common man?

A. If you look at the number of kilometers flown and the amount of rupees collected, the rupees collected per km are actually going down. So in aggregate, the cost of flying is going down. Now that’s the overall story and now you have to look at the individual routes over time.
10/11/16 Sindhu Bhattacharya/Swarajya

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