Wednesday, Oct 01, 2014

Air India and Indian Airlines: The seven-year hitch

Mumbai | Posted: August 27, 2014 5:16 am

Seven years after the merger between Air India and Indian Airlines, there is little to celebrate, with the airline failing to achieve operational and financial parameters set out in 2007, reports Rhik Kundu in Mumbai. Weighed down by debt of R44,000 crore, it remains in the red with a loss of R5,388 crore in FY14 on the back of R5,199 crore in the previous year. Indeed, with a host of low-cost carriers winning over flyers, the airline’s market share at the end of July was 18% compared with 19.8% in August 2007; only on a couple of occasions in the seven years has the share risen to above 20%.

Click here for graph

During this time, Air India started several new routes including Delhi-Jeddah, but discontinued flying on routes such Amritsar-Delhi-London. In 2012-13, flights to Toronto were withdrawn.

In June, the airline joined the world’s largest airline partnership, Star Alliance, hoping it would boost revenues by 4-5% thanks to passenger additions. A few weeks ago, civil aviation minister Ashok Gajapathi Raju issued a 26-point agenda giving the carrier three years to turn around but that seems like a tall ask.

Rhik Kundu | The Financial Express

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