Foreign bound local carriers may hit AI

New Delhi: The road ahead seems to be turbulent for the public sector airlines Air India and Indian after their merger at the end of this month. The government’s proposal to allow private airlines such as Kingfisher, Air Deccan, IndiGo and GoAir to fly abroad may hit the two sister carriers.
The move comes at a time when the Indian and A-I are trying to synergise their operations and absorb nearly 100 aircraft over the next five years. Therefore, it is felt that increased competition at a time when they are going through merger pangs would be painful for the merged entity.
“Indian would be the worst-hit by the new move as the revenue from international routes have been the mainstay of the airlines and has contributed substantially to its topline. Entry of new carriers would take traffic away from India leading to huge revenue loss,” said the official.
It is felt that the focus would shift towards international operations during the initial stages of the merger and this would affect the airline’s leadership po]sition in the domestic market.
13/07/07 Nirbhay Kumar/Economic Times

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Categories: Air India Jul 2007, Foreign Jul 2007