Air India plans to rope in consultant to chalk out business strategy

Air India, which has reported an operating profit of Rs 105 crore for the fiscal ended March 2016, the first time since Indian Airlines merged with it in 2007, is staying afloat on a Rs 30,000 crore government bailout.

By: PTI | New Delhi | Published:November 9, 2016 8:19 pm
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Air India plans to rope in consultant for hand-holding and to help it chalk out short and long-term business plan strategy as it seeks to turn profitable by March 2019, much ahead of the original deadline of fiscal 2021-22. The government-owned carrier has recently issued a Request for Proposals (RFP) for the purpose of selecting a consulting entity that has expertise in airlines sector in this regard.

Air India, which has reported an operating profit of Rs 105 crore for the fiscal ended March 2016, the first time since Indian Airlines merged with it in 2007, is staying afloat on a Rs 30,000 crore government bailout. “The consulting firm shall review existing internal processes and prepare business plan strategy for short and long-term (10 years), engagement would also include benchmarking as per industry standards,” Air India said in the RFP document.

Besides, the firm would also carry out gap analysis, recommendations for changes and detailed implementation blue print, keeping in mind current and future market scenario, handhold Air India in implementing these plans, it said. Air India along with its two subsidiaries –Air India Express and Alliance Air — at present has a fleet of over 130 aircraft in its fleet, comprising Airbus, Boeing, ATR and CRJ planes. The airline commands 14.7 per cent market share in the domestic air space.

In addition, the carrier plans to add another 100 planes in its fleet, including smaller ones for the regional connectivity over the next four years, to take on the competition in the fast growing domestic market, which is seeing over 20 per cent growth for nearly two years now.

In 2012, the then UPA government had granted over Rs 30,000 crore to Air India under a turnaround and financial restructuring plan, stretching over a period of nine years, to turn around the company. These funds are to be infused over till the fiscal 2021, of which the carrier has so far utilised Rs 21,000 crore.