Monday, August 13, 2018

Why government needs to take more proactive role in addressing cost woes of Indian airlines

The troubles at India’s second largest airline by passengers, Jet Airways, bring one to question the government’s wait-and-watch approach. Especially, since there are reports of yet another mega-bailout package being mulled by the government for Air India (AI).

Why AI needs more funds is due to rampant mismanagement coupled amid high-cost environment. And the latter has come about due to high taxation on jet fuel and a depreciating rupee coupled with intense competitive pressures forcing airlines to offer ridiculously low fares.

The government may be helpless in the matter of fares or even in how any airline manages its operations but it can surely do its bit to improve costs. Why prop up only Air India while doling out a step-motherly treatment to private airlines, especially since the government is already a participant in the sector through AI?  Both, AI and Jet are legacy carriers with inherent high-cost structures, helping one by infusing a large dose of funds while watching developments at the other is not all right.
13/08/18 CNBC TV18
To Read the News in full at Source, Click the Headline


Post a Comment