Thursday, August 30, 2018

A loss-making airline for almost a decade, Air India has no reason to exist

New Delhi: What purpose does Air India serve? For an airline surviving on Rs 4,600-crore annual bailout package, the reasons for its existence have to be extremely convincing. But that's not the case with the national carrier. It serves a mere 12.4 per cent of the domestic passenger traffic, and competes with aggressive private sector peers like IndiGo, SpiceJet and Jet Airways who are constantly baying for passengers. Air India's laidback attitude has, in fact, resulted in the gradual fall of share - from 14.8 per cent two years ago to 12.4 per cent in the last month.
On the international side, the market share is a bit higher - 16.55 per cent - but the growth has largely been stagnant as the airline is hardly preferred by international passengers. The airline flies over 2.1 million passengers every month.
Air India's turnaround was so futile that even after pumping in Rs 28,000 crore into the airline, it could barely generate operating profits (not even net profits) of Rs 403.03 crore in two financial years  (2015-16 and  2016-17). Just when the airline management was chuffed about this failed turnaround story, the government (duly) realised that it cannot continue to run the airline.
30/08/18  Manu Kaushik/Business Today