Air India flying low

[VCheng]

The economic troubles of PIA are not unique to the region, as the following shows:

from: Air India: Flying low | The Economist

Air India
Flying low
India’s flag carrier is in big trouble
Jul 21st 2012 | MUMBAI | from the print edition


Well-to-do Indian graduates used to line up to join Air India. The national carrier was founded in 1932 and nicknamed the Maharajah. Singapore and Malaysia sought its advice when setting up their state airlines in the 1970s, as a former director recalls. “This was a temple of modern India,” he sighs.

Today the Maharajah is looking shabby. Air India made an estimated loss of $1.45 billion in the 2011-12 fiscal year, according to the Centre for Asia Pacific Aviation (CAPA), a consultancy. That was nearly three-quarters of the losses made by all Indian carriers combined. Air India has not made a net profit for six years. Its losses have ballooned since a disastrous 2007 merger with Indian Airlines, its state-owned counterpart for domestic routes (see chart). The union has sparked spats—the latest pilots’ strike, which ended on July 3rd, cost almost $120m. The government bailed out the merged firm with $5.8 billion in April, after a $3.5 billion debt restructuring last year.

Yet the government is unlikely to give up on the combined carriers, whose share of the domestic flight market has dropped from 42% to 16% over the past decade. It would be hard to attract a buyer. Air India spends over a quarter of its operating revenue on employees’ pay and benefits; Jet Airways, a domestic rival, spends a tenth. The board approved a voluntary-retirement scheme for 5,000 staff this month, but needs the government’s approval. The Maharajah is even thinking of selling its art collection.

Air India keeps ticket prices uneconomically low. When it slashed prices last year, it forced others to follow suit. That, and India’s high taxes on aviation fuel, make it hard for any airline to earn money. Only one of India’s six carriers, Indigo, a budget airline, is expected to post a profit this year. Some blame the rise of Gulf airlines on international routes. “Emirates is now the national airline of India. That’s what people say,” sighs the retired Air India man.

 

[IZVINITE]

We are very much aware of Air India's Plight & Know It's in Mess. It has been Bailed Out Twice. People are raising there voice that the Government control should be moved to private sector, so that the tax payer money is not wasted any more. On the other hand the government will get more tax revenue from such corporation that take over the airline.

 

[Skull and Bones]

Privatize it, and see it turn around within a year or two. Air India has the highest employee to aircraft ratio in the world, yet the service is as good as crap. And not to mention the airfare, highest among all the players in India, maybe after Kingfisher. People here opts for Spicejet, Indigo, go air and jet airways.

 

[Splurgenxs]

didn't i read somewhere about AI going into profit after it fired striking workers?leme chk.

edit: hereStrike fails to affect AI revenues, up 21 pc in Q1 - Business Today

 

[VCheng]

didn't i read somewhere about AI going into profit after it fired striking workers?leme chk.

edit: hereStrike fails to affect AI revenues, up 21 pc in Q1 - Business Today

Well, this quote from the Economist above might be relevant:

.... the latest pilots’ strike, which ended on July 3rd, cost almost $120m......

 

[Tshering22]

Privatize it, and see it turn around within a year or two.

You really think someone would want to buy the airline entirely? Ratan TATA offered to re-take the airline with the condition that he wants to change the management completely. But as the airline is loaded with inept, callous, ignorant and lazy clowns (except technical side who are very skilled engineers), the government backtracked.

The only way Air India can be turned around is to close the airline and re-start it from scratch as a private sector.

 

[harpoon]

Close down this white elephant before it sucks in more tax payer's money.

 

[ajtr]

Blame prful patel.....You can sure find scam in aircraft purchases under his tenure.

 

[harpoon]

Blame prful patel.....You can sure find scam in aircraft purchases under his tenure.

You mean AI was doing well before his term.

 

[RPK]

Air India only doing text book landing Others not

 

[Skull and Bones]

You really think someone would want to buy the airline entirely? Ratan TATA offered to re-take the airline with the condition that he wants to change the management completely. But as the airline is loaded with inept, callous, ignorant and lazy clowns (except technical side who are very skilled engineers), the government backtracked.

The only way Air India can be turned around is to close the airline and re-start it from scratch as a private sector.

My idea was to sack majority of the incompetent workforce, and sell or lease less profitable routes to some other players, and eventually cutting operational plane numbers to make the company sustainable. Air India is seriously overstretching their capability.

And if it's privatized, i don't think the management will listen to our idiot politicians.

 

[ApparentRaceTraitor]

When you have stewardesses asking a 14 year old boy (my experience, a long long time ago) whether he would like water, 'soft drinks' or beer, thats when you know they hire practically anyone with a heartbeat and throw them into the plane. Shabby.