‘Maharaja is dying a slow and certain death’

New Delhi: State-run Air India is slipping into a “slow and silent decline” and unless drastic steps are taken the airline would slide into a “point of no return”, consulting firm Booz & Co. said in a presentation to the company’s board recently.
The presentation — circulated to the board of National Civil Aviation Company of India Ltd (NACIL) that runs the national carrier — has blamed a host of factors including an incomplete integration between flag carrier Air India and domestic airline Indian for the precarious state of finances.
“The current business model is not self-sustaining and will require ongoing infusion of funds,” the presentation said, a copy of which is with Hindustan Times. “The majority of flights are not profitable and the fleet structure is not aligned to a hub-and-spoke model. Productivity is low and the airline is overstaffed in multiple areas.”
The company is saddled with an accumulated loss of Rs 7,200 crore with a debt burden that is estimated at Rs 15000 crore. “Though the report containing inputs provided by the airline, was circulated amongst the Board, there was no detailed discussions way forward,” NACIL said in an email reply to HT. “The report talks of various situations and one of them is a slow and silent decline of NACIL if certain remedial measures are not implemented. This was not the only suggestion.” Booz & Co. refused to comment on the report.
21/05/10 Tushar Srivastava/Hindustan Times

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Categories: NACIL May 2010