On March 15, the Narendra Modi government announced that the state-owned airline is set to make an operating profit during the 2016 fiscal—the first time in nine years. Often accused of wasting taxpayers’ money, the improved financial performance is expected to bring some respite from years of negative publicity. View more at #Hindustan360 .
The government also asserted that with regard to safety issues for air travellers, it will be the endeavour of the government “to keep our airports and skies absolutely safe” through foolproof adherence to prescribed international standards.
What does media says
“By cutting its operational expenses by almost 11 per cent, Air India has turned from a Rs.2,636 crore loss making unit in 2014-15 to a Rs.8 crore operational profit unit in 2015-16,” Civil Aviation Minister Ashok Gajapathi Raju said while replying to the debate on demand for grant for his ministry.
He also pointed out that Air India joined Star Alliance in 2014, “which has helped it to integrate better with the international civil aviation market”. The minister also recalled the unique contribution of Air India in the “hour of crisis – evacuating about 6,000 nationals from Yemen, 1,300 from Iraq and Libya and 17,500 passengers from quake-affected Nepal”.
[source – Economic Times]
In what is now believed to have been an ill-timed move, the government had fused Air India—an airline flying internationally—with domestic carrier Indian Airlines in 2007, creating a bigger entity, the National Aviation Company of India Ltd (NACIL).
Both Air India and Indian Airlines were making losses at that time, bleeding Rs541 crore and Rs240 crore, respectively, in 2007.
The merged company had more than 30,000 employees—256 per plane—in 2007. This was twice the global standard. Air India spends almost one-fifth of its revenue on employee pay and benefits while other airlines such as Jet Airways spend about one-tenth. Since the merger, NACIL has tried to cut costs. Its employee-to-aircraft ratio stood at one to 120 in 2015, which is still more than the global average of one to 100.
[source – Quartz India]
Already, three of India’s biggest airlines—SpiceJet, IndiGo and Jet Airways—have posted profits quarter-after-quarter this year. These three control more than 70% of India’s civil aviation market.
View more at #Hindustan360 .