Mumbai: Last September, when India’s government said it planned to let foreign airlines buy up to 49% of domestic carriers, the offer seemed as tempting as a stale chapati. India’s six largest airlines will post combined losses of $1.6 billion this fiscal year, predicts the Centre for Aviation, a Sydney-based consultancy, and have a combined debt of $13 billion. State-owned Air India, which accounts for most of those losses and debts, lives off government bail-outs while launching price wars that keep its rivals’ fares unsustainably low. Jet Airways, one of the largest private carriers, has not reported a full-year profit for five years. Kingfisher Airlines, a once-popular carrier founded by a booze tycoon, has been too broke to fly since October.
Yet AirAsia of Malaysia, one of the continent’s most successful airlines, announced last month that it was setting up an Indian carrier with the Tata group and another local investor. The Tata family has a soft spot for aviation: it started the country’s first airline in 1932, which was nationalised as Air India, and has since tried unsuccessfully to re-enter the business.
23/03/13 Economist
