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  1. Air India on right flight path to achieve turnaround: Board member

Air India on right flight path to achieve turnaround: Board member

Air India has significantly improved its financial position under the turnaround plan but the national carrier needs to be aggressive to get better results.

By: | Mumbai | Published: November 9, 2014 9:05 AM
Air India has significantly improved its financial position under the turnaround plan but the national carrier needs to be aggressive to get better results. (Reuters)

Air India has significantly improved its financial position under the turnaround plan but the national carrier needs to be aggressive to get better results. (Reuters)

The struggling Air India has significantly improved its financial position under the turnaround plan but the national carrier needs to be aggressive to get better results, an AI official said today.

Sounding optimistic about achieving a turnaround by the 2021 deadline, AI Board member R Dholakia, however, said the carrier also needs to improve on-time performance, besides striking a fine balance between social and commercial aims.

“AI’s performances on certain parameters have improved significantly. It appears that roughly 2021 is the time when the turnaround will be achieved. But the airline needs to be aggressive, and not defensive, in its approach,” he said.

Dholakia was talking to reporters on the sidelines of a function here to mark 110th birth anniversary celebrations of the airline founder JRD Tata, jointly organised by Air India and JRD Tata Memorial Trust.

The Government-run carrier has been reporting losses for the past several years. In 2013, it posted over Rs 5,300 crore in losses, a tad better than the previous year when this figure stood at around Rs 5,700 crore. The airline is also sitting on a debt pile of over Rs 45,000 crore.

Amid mounting losses, the Government in 2012 announced a Rs 30,000-crore bailout package. Of this, the airline has got almost half of the money (Rs 14,575 crore) till May this year and the 2014-15 Budget has earmarked Rs 6,500 crore more.

Dholakia said the national carrier has to ensure that the taxpayer money is utilised in the right manner and the turnaround is achieved in the given time.

He was quick to add that “the airline also has to meet its social objectives apart from achieving profitability. So one has to strike a balance between the two.”

Admitting that there are certain legacy issues on the airline’s cost-structure, he said the despite the ongoing hiccups, the Dreamliners will prove to be a game-changer for AI as these fuel-efficient jumbo planes can contribute substantially in the overall cost reduction plans.

About impact of entry of low-cost AirAsia India and soon-to-be-launched full service Tata-Singapore Airlines joint venture Vistara on AI’s turnaround, he said these players were not around when the revival plan was prepared.

“When the turnaround plan was prepared and accepted by the Board new players (Vistara, AirAsia India) were not in the vicinity. Similarly, the fall of rupee against dollar made a big difference to AI finances. Such externalities are a crucial part of the play,” Dholakia added.

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