Airline Profile: Air India – Part 2

By Ankur Deo | April 15, 2020

In the last article, we discussed about Air India’s nostalgic past and the story behind the brand. The carrier has always had its share of huge fans as well as vociferous detractors. In recent years, mostly, post its merger with national low cost carrier, Indian Airlines in 2006, as its losses have mounted, there’s been an increasing demand that airline should be sold to a private operator and cease to be a liability on the government.

Air India Boeing 747-400.

In this article, we look at Air India(AI)’s story post its prime. In the early 2000s, AI was one of the top three carriers in India’s domestic and international market. However, as the Indian aviation industry grew, the Low Cost Carriers (LCCs) began capitalizing the market, and full service carriers like Kingfisher Airlines, Air India and Jet Airways suffered the most. The dominance of LCCs ameliorated, thanks to the success of airlines like IndiGo, SpiceJet and GoAir. That, alongside the financial crash of 2008-09 did not do any good for Air India.

After not having made profit in any financial year after its merger with Indian Airlines in 2006, AI posted its highest ever loss in 2018-2019 with numbers mounting to a staggering Rs. 8557cr ($1.4bn).

The Government has helped Air India to stay afloat numerous times in last years, notably through tax holidays and loan guarantees. However, the carrier has repeatedly posted losses, and the coronavirus pandemic might as well be the final nail in the coffin. According to experts, airlines that do not have strong finances can be shut down by as early as May-June 2020, seeing the effect of COVID-19 on Asian, and especially, Indian aviation, which is now completely shut down. Looking at these aspects, things do not look very encouraging for Air India presently.

After having poured millions of dollars in the national carrier to help keep it afloat, the government finally decided to privatize the carrier, and on January 28, 2020, decided to open a bid for the airline later that month. While a few entities did show interest in bidding for the beleaguered airline, the bid was put in the shadows in months to come, thanks to Coronavirus!

©Business Standard

Air India once defined Indian aviation, both nationally and internationally. Lately though, in the era of highly dynamic LCC-favored industry, AI’s time has come – if not bought by any private entity, India’s Maharaja (the King) might shut down for good. We hope that post the pandemic, the carrier will find a buyer, and the AI brand will live on for years, and possibly, decades!

Have you ever traveled with Air India? How was your experience? Let us know about your experience in the comments!

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