Thursday, March 02, 2017

CEA wonders whether Air India should 'exist at all'

Air India's performance has improved with competition posed by private players, Chief Economic Advisor Arvind Subramanian said today, but wondered whether the state-owned airline should "exist at all". The national carrier, staying afloat on a Rs 30,000-crore bailout package from the central government, is working on ways to improve its financial position. In the last fiscal ended March 2016, the airline had posted an operational profit of Rs 105 crore. "Air India with IndiGo and Jet Airways   is very different from Air India without... Whether Air India should exist at all even with Jet Airways and IndiGo is another question which we don't want to go into now," Subramanian said. The point is competition has actually improved Air India's performance, he added. Subramanian was delivering the keynote address at the national conference on economics of competition law here. Despite a debt of Rs 46,570 crore, including Rs 15,900 crore on account of aircraft acquisition, Air India managed to report an operating profit in 2015-16. In the Union Budget 2017-18, the airline has been allocated Rs 1,800 crore as part of the Rs 30,231 crore financial bailout package. Last month, the government informed Parliament that Air India is expected to post an improved operating profit margin this year even as liquidity constraints continue to impact the carrier's smooth performance.
02/03/17 moneycontrol
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