Wednesday, August 22, 2018

Air India may face more headwinds as govt backtracks on Rs 30,000 crore second bailout package

The July domestic airline data released by aviation regulator DGCA show how slipping service standards and a shrinking market share for Air India have become par for the course. Air India (AI) had the highest cancellation rate among scheduled airlines last month (2.49 percent against an average of 1.49 percent). It also had the highest number of passenger complaints among all domestic airlines and worst on-time performance at four of the country's busiest airports. Every third Air India flight from and to these four airports was delayed as AI’s OTP was 67.5 percent. At Mumbai, almost every second flight was delayed. Only in terms of the number of passengers affected by flights delayed beyond two hours did Air India allow any other airline to better its own record.

While 50,612 IndiGo passengers were affected, only 43,804 from Air India suffered due to inordinate delays. And to top it all, Air India (along with Jet Airways) lost market share in July (12.4 percent versus 13.3 percent at the start of 2018) while IndiGo ramped it up to over 42 percent. In April, May and June too, AI had topped cancellations, passenger complaints and reported shrinking market share.

With a large number of aircraft non-operational and no new fleet induction plans, it is quite obvious that Air India’s market share will shrink further in the coming months. Air India is in a state of permanent flux, with falling service standards and shrinking share of the domestic market. And to top it all, government’s dithering about its future is unlikely to give the airline any sense of calm, anytime soon.
22/08/18 Sindhu Bhattacharya/First Post