May 22, 2017 TnH Global

Centre has a ‘winning’ strategy to revive Air India says Jayant Sinha

Working on a “robust” multi-dimensional transformation plan for the ailing airline, says the Minister of State Civil Aviation

The Central government has a “winning” strategy for its ailing national carrier Air India which is to turn it into a “great” global airline, Minister of State Civil Aviation Jayant Sinha said in an interview.

His comments come days after Cabinet Minister for civil aviation Ashok Gajapathi Raju said that the Centre is reviewing a range of options, including possible disinvestment, to revive Air India.

“I think Air India has a terrific future ahead of itself because India does need a great global airline like British Airways, Lufthansa, Qantas or Emirates and we think that Air India, in that regard, has a winning strategy to become a great global airline for India,” Mr. Sinha said, in an interview to The Hindu.

Interestingly, all the flag carriers mentioned by the Minister, except United Arab Emirates’ Emirates, have been privatised long back by their own countries.

While British Airways, flag carrier of UK, was privatised in 1987, Australian carrier Qantas was partly privatised in 1992 and fully in 1995 and Germany’s Lufthansa was fully privatised in 1997.

Global share

Till March this year, Air India operated its flight on 118 domestic and 64 international routes. The share of Indian airlines in total international traffic has declined to 36% in January-March 2017 from 38% in a year-ago period.

International carriers carried 64% of Indian passengers aboard in January-March 2017, compared to 62% a year ago. While Jet Airways carried the most number of international passengers to and from India (14.5%), it was followed by Air India (10.7%) and Emirates (9.5%) during this period.

Sinha said the government is working on a “robust” multi-dimensional transformation plan for Air India which includes strengthening its financial position, improving corporate government, strengthening the airline’s Board and inducting new people in its management.

When asked if Air India will shift its focus from domestic to international market, Mr. Sinha said, “It’s not one or the other because the reality is if you want to win as far as the international routes are concerned, you need a strong domestic network that feeds your international route as well.”

To a question on whether disinvestment for the national carrier is being contemplated or not, the junior civil aviation Minister said, “We are considering a number of different alternatives.”

NITI roadmap

The Centre recently asked NITI Aayog to formulate a roadmap for Air India’s future as the government is reconsidering its strategy on future equity infusions into the national carrier. As part of the turnaround plan, the Centre has infused ₹24,745 crore as equity into Air India, till the end of 2016-17. He said that the Centre has to ensure that the current debt burden of the airline, which is a “crushing load” on its performance, is reduced.

“Due to the debt burden that they are carrying right now, it is very difficult for them to invest in their equipments, services, marketing, talent development and so on. So, the debt burden which, of course, we inherited from the previous government is a crushing load that Air India is carrying right now and we have to find a way of restructuring it,” the Minister said.

Air India’s debt stood at Rs. 50,357 crore at the end of 2015-16.

News Source: www.thehindu.com