1. With more funds, Modi government plans to revive Air India

With more funds, Modi government plans to revive Air India

The Modi government is planning to infuse more funds into Air India to bring back its heydays.

By: | New Delhi | Updated: October 16, 2016 11:16 AM
The Modi government is planning to infuse more funds into Air India to bring back its heydays. (Reuters) The Modi government is planning to infuse more funds into Air India to bring back its heydays. (Reuters)

Those who travelled in Air India during 1960s-70s still feel nostalgic talking about it. But the younger generation has witnessed the stark reality surrounding the quality of service being provided by the national carrier nowadays. Air India has over the years faced stiff competition from Indian and international rivals. Among the country’s top carriers, it finds itself at the top for flight cancellations and complaints and at the bottom for on-time performance. However, the Centre, which seems to be aware of the issues and problems plaguing the prestigious airline, is considering to provide a fillip to bring back the heydays of Air India. The Modi government is planning to infuse more funds into Air India as almost three-fourth of the Rs 31,000-crore equity promised during UPA’s tenure has been received, a Times of India report said.

“We are considering alternatives to strengthen its finances. AI’s domestic share fell as it did not add equipment quickly while the market was growing. Now that their finances will be shored up, they will add equipment and gain market share. The strategy for AI is to have a strong domestic network with the hub currently in Delhi from where it will have direct flights to global business hubs and cities,” Aviation Minister Jayant Sinha has said.

The government recently has approved Air India’s plan to add more planes to its fleet, that may see its just over 100 aircraft fleet double in next three to four years. “Air India will be a robust global airline. Its domestic market share fell as it did not add capacity while others did. The airline will get more planes and it will soon have a very strong domestic network with hub in Delhi,” Sinha said.

The Centre’s decision came after Air India has reported an operating profit of Rs.105 crore, for the first time in a decade, in the last fiscal aided by lower fuel costs and rise in passenger numbers. This is the first time since 2007 — when the erstwhile Indian Airlines was merged with Air India — that the national carrier has eked out an operating profit.

Having an operating profit in a decade is an encouraging sign for the airline, which is seeking to turn around its fortunes amid stiff competition. A decline of nearly 31 percent in fuel costs in the last financial year compared to the year-ago period was a key factor in the airline becoming operationally profitable.

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