Swissair was the platinum standard in global aviation once. Suddenly in 2001, scenes of its passengers stranded at airports when oil companies shut the fuel tap for want of funds flashed across the world. It went bankrupt and re-emerged to be acquired by Lufthansa.
Trans World Airlines went broke thrice. United Airlines created records in US bankruptcy courts. Today, Warren Buffett who was averse to investing in aviation owns a slice of United which has a market capitalisation of $24 billion. Is there a lesson for the government on how to handle Air India? One of the most stressful events of the past year for the government in its economics department was the strategic stake sale in Air India.
That was the reform piece the government wanted to showcase but turned out to be a flop-show. Is Air India so bad that no one would touch it with a barge pole? Qatar Airways chief executive Akbar Al Baker has the answer in Thursday’s edition of ET. “We need to have a strong partner and we take the airline without the baggage.’’ The punch line here is ‘baggage’. Air India has a debt of more than Rs 55,000 crore. It has a staff strength of 14,000 almost equivalent to that of IndiGo which earned a profit of Rs 2,242 crore last fiscal. Many of its 122 aircraft are rickety due to poor maintenance. Its market share has fallen to 12.4% in July from 13.5% a year earlier.
07/09/18 MC Govardhana Rangan/Economic Times
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Trans World Airlines went broke thrice. United Airlines created records in US bankruptcy courts. Today, Warren Buffett who was averse to investing in aviation owns a slice of United which has a market capitalisation of $24 billion. Is there a lesson for the government on how to handle Air India? One of the most stressful events of the past year for the government in its economics department was the strategic stake sale in Air India.
That was the reform piece the government wanted to showcase but turned out to be a flop-show. Is Air India so bad that no one would touch it with a barge pole? Qatar Airways chief executive Akbar Al Baker has the answer in Thursday’s edition of ET. “We need to have a strong partner and we take the airline without the baggage.’’ The punch line here is ‘baggage’. Air India has a debt of more than Rs 55,000 crore. It has a staff strength of 14,000 almost equivalent to that of IndiGo which earned a profit of Rs 2,242 crore last fiscal. Many of its 122 aircraft are rickety due to poor maintenance. Its market share has fallen to 12.4% in July from 13.5% a year earlier.
07/09/18 MC Govardhana Rangan/Economic Times
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