The future for Air India, India's national carrier

Should Air India be privatized??

  • Yes

    Votes: 38 71.7%
  • No

    Votes: 11 20.8%
  • Not sure

    Votes: 4 7.5%

  • Total voters
    53

thakur_ritesh

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I have started flying AI ( Domestic) from the last month and I was very much impressed.

All the flights were on time, in fact there was a sense of urgency amongst the crew to get the plane off the tarmac at the earliest.

Service levels have certainly gone up. The flight crew were smiling, no scowls on the face. food was very decent.

And the best part was on Delhi-Bhopal sector the tickets were cheaper than Jet Airways by around Rs. 4000 on the round trip.
In contrast the KFA has become a shadow of it's past. It doesn't even look like a full service airline any more, but then they are offering some serious dirt cheap fares.
 

sob

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Ritesh, I always had problems with Malaya so for me KFA has never been an option.
My choice is Indigo and then Jet/IA whichever is cheaper.
 

aeroblogger

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Until a few years ago, I was willing to pay thousands just to avoid AI. But AI has improved drastically over the last few years. Service levels are up, the food is edible, the website is usable, and on-time rate is decent. And best of all, AI is usually priced competitively - when you add in the cost of the meal and other add-ons on IndiGo or SpiceJet, AI is usually the cheapest.

So now I'm an Air India Gold member and I fly AI almost exclusively.. It's been one crazy change for sure.
 

aeroblogger

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In contrast the KFA has become a shadow of it's past. It doesn't even look like a full service airline any more, but then they are offering some serious dirt cheap fares.
I would be careful about taking those dirt cheap fares up. After EK Bharat Bhushan was replaced at the DGCA, the DGCA has stopped conducting daily checks on KFA aircraft... I don't want to think about what kind of corners they might be cutting... They can't pay their fuel bill, they can't pay their mechanics - what kind of maintenance is going to be done?
 

LurkerBaba

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Excellent article by aeroblogger:


Air India Can be Utilized to Fulfill Strategic Objectives


Air India is much maligned for its poor state of affairs. It loses a staggering amount of money each year, due to political interference, a bloated and inefficient workforce, corruption, and incompetence/mismanagement.
...

However, Air India is unlikely to be privatized in the near future for a few reasons. Firstly, it's unlikely that a private investor would want to touch AI in the condition it is in. And secondly, it's unlikely that the government mantris will want to give up one of their playthings. So, with the reality of state-ownership set in, the government should look at how the Maharaja can be better utilized to fulfill State objectives.
...
However, there are ways in which the government can take advantage of Air India's capabilities without destroying AI's profitability. In order to better understand some of these possibilities, we can look at 2 better-run flag carriers – Air China, and Turkish Airlines.

Air China is the official flag carrier and one of many state-owned carriers in China. The airline is, according to the Chinese government, the largest airline in the world by market capitalization, and the most profitable carrier in the world. It is extremely difficult to believe the latter, since Air China is rather inefficient, and it doesn't command very high yields. Regardless, Air China is doing far better than our own Air India, and there are some lessons that can be learned from it.

Any airline's biggest asset is its route network. Commercial air service has a variety of positive benefits – it increases both economic and political ties between the cities served, and can be of great strategic value.

Air China serves many routes which serve a strategic purpose. The most notable is service on the Beijing-Pyongyang sector – Air China is the only non-DPRK carrier to fly to DPRK. This service strengthens ties between the Chinese and North Korean governments and economies, and helps China keep its neighbors close. Air China also serves Ulaan Bator, the capital of Mongolia. This destination keeps the Mongols close to the Chinese.

However, destinations don't need to make less commercial sense to have strategic importance. Air China's services to neighbors like South Korea, Japan, Taiwan, and Vietnam all are very profitable in addition to their strategic importance.

The Chinese state-owned carriers not only keep their own neighbors close, but they also project China's diplomatic power throughout the world. Apart from Bhutan (which only Bhutanese carriers serve), every neighbor of India has service by a Chinese carrier, an important part of China's strategy to surround India with allies.

Strategic interests aren't just important internationally – Air China's destinations domestically also work to facilitate rapid and comprehensive domestic connectivity, and to bring prosperity to less developed areas. Tibet and Xinjiang, the two areas of China which are seperatist, have lots of air service, helping integrate the areas with the rest of the country.

The route network which Air China and the Chinese state-owned carriers have built helps fulfill strategic foreign policy and domestic objectives, and demonstrates how state-owned carriers can be utilized well by their governments.

Another example of a carrier which is utilized by its government well is Turkish Airlines. Unlike Air China or Air India, Turkish is only partly state-owned – 51% of the airline is in private hands. This partial privatization helps cut down on inefficiency and corruption, but still allows the government to utilize the carrier in an effective way.

Turkish's route network contains a variety of routes of strategic importance. The airline serves every Middle Eastern country, bringing Turkey closer to other Arabic countries. Turkish also serves quite a few EU destinations, notably in Germany. This brings Turkey closer to the European countries which Turkey wants to partner with.

However, what is most remarkable about Turkish's route network is how they have linked with countries which Turkey has declared of national strategic importance. Turkey has been working to import raw materials and develop infrastructure in Africa. Turkish not only serves all the major African destinations, like Accra, Addis Ababa, Johannesburg, Cairo, Dakar, Lagos, Khartoum, Tunis, Casablanca, Dar es Salaam, and Tripoli, but it also serves second tier cities too. Turkish serves Sabha, Benghazi, and Misrata (Libya), Abidjan (Ivory Coast), Kinshasa (Congo), Kigali (Rwanda), Mogadishu (Somalia), and Entebbe (Uganda) from its hub in Istanbul, strengthening business and political ties and increasing cultural diffusion (improving soft power).

Turkish also has a very impressive Central Asian route network, a region which India has been working on developing stronger ties with. Almaty and Astana (Kazakhstan), Baku, Ganja, and Nakhchivan (Azerbaijan), Batumi and Tbilisi (Georgia), Bishkek and Osh (Kyrgyztan), Dushanbe (Tajikistan), Tashkent (Uzbekistan), Ashgabat (Turkmenistan), and Ulanbator (Mongolia) are all destinations in the Turkish Airlines network.

After seeing how well other countries use their flag carriers as a tool, we can come back home and compare to Air India. Commercial air service can be used to further India's "Look East" and other international development policies.

Air India already attempts to tailor its route network to serve the government's wishes. Its low cost subsidiary, Air India Express, serves migrant gulf traffic returning home. The carrier has been very successful with the goal, with high load factors. Air India also serves 2 cities of significant strategic interest from its legacy Indian Airlines network – Kabul and Yangon. However, even these cities are underserved (Yangon is only served twice weekly).
..
In contrast to the limited routes of strategic value, Air India wastes lots of money on politically mandated prestige routes. A loss of $60 million each year is posted on Air India's route to Toronto, yet the route is continued due to political pressure. Politicians want service to Chicago, not Congo, despite the fact that the latter would be a far more useful destination.
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Full article: Air India Can be Utilized to Fulfill Strategic Objectives
 

aeroblogger

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Re: Future of Air India, India's national carrier

Air India Takes Delivery of First Boeing 787!
Air India has taken paper delivery of its first Boeing 787, registered VT-ANH. After every delay imaginable, the Ministry of Law and Justice has finally approved the compensation package between Air India and Boeing, and the DGCA has provided safety clearance for the aircraft. Air India is the 4th operator of the type, after All Nippon Airlines, Japan Airlines, and Ethiopian Airlines.

With the delivery of the 787, Air India now has one of the most technologically advanced airliners in the sky, allowing it to cut costs on fuel efficiency. The 787 sports a fuel efficiency of almost 20% less than the Airbus A330, a similar sized airliner which Air India also operates.

Air India plans to operate the 787 on domestic routes initially so that crews can become familiar with the aircraft. After that, the aircraft will operate to Australia (Sydney and Melbourne) from AI's hub in Delhi.

The formal delivery ceremony of VT-ANH will take place on Monday, followed by a Monday evening flyout. The aircraft is expected to arrive in Delhi next Tuesday.
At last!
 

Zebra

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Shut it or return it to Tata.
The second option is the best one.

51% stays with GoI and 49% with Tata and let Tata operate it.
 

aeroblogger

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The second option is the best one.

51% stays with GoI and 49% with Tata and let Tata operate it.
I never have managed to figure out what everyone's obsession with Tata is...

I agree that partial privatization is the best option (I think GoI should only keep a 49% stake), but there are better ways of picking an operator than blindly declaring Tata.
 

Daredevil

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Loss Making Routes of Air India

Air India and its subsidiaries are operating flights on 68 international sectors and 122 domestic sectors.

Based on April-June, 2012 Provisional route-wise analysis, the details of routes are as under:-

1) 99 Services meeting fuel cost but not meeting cash cost;
2) 68 Services meeting cash cost but not meeting total cost;
3) 16 services meeting total cost.

A task force, headed by Joint Secretary, Ministry of Civil Aviation, has been constituted to examine route economics and to find ways and means to rationalize the routes so as to make the operations more cost effective.

This information was given by the Minister of Civil Aviation Shri Ajit Singh in a written reply to a question in Rajya Sabha today.

Press Release
 

W.G.Ewald

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Boeing delivers first 787 from North Charleston; plane will leave Friday | The Post and Courier | Charleston SC, News, Sports, Entertainment
After weeks of delays and with no advance public notice, Air India took delivery in North Charleston today of its first Boeing 787 Dreamliner.

The plane is the first to be delivered from Boeing's local campus but the jet was not made in South Carolina. It was assembled in Everett, Wash., and flown to Charleston International Airport for pickup by Air India.

The Wall Street Journal reported that the carrier plans to pick up two more 787s this month, citing an unidentified executive from the airline.

Five completed Air India jets are on the Boeing flight line in North Charleston, including the plane delivered today.

The first hand-off was scheduled to take place last week. No reason has been given for the delay, though one apparent glitch was that state-owned Air India had to approve compensation from Boeing for another scheduling conflict. The carrier was supposed to pick up its first Dreamliner four years ago, but the 787 program got bogged down by numerous manufacturing setbacks.

The plane will be flown to India Friday, Boeing said in a statement. It was not immediately clear whether there will be any official send-off ceremony.

"Today is a great day for Air India as the most technologically advanced and fuel efficient airplane in the world joins our fleet," said Rohit Nandan, Air India's chairman and managing director. "The 787 will allow Air India to open new routes in a dynamic marketplace and provide the best in-flight experience for our passengers."

Air India is the fifth airline in the world to take delivery of a 787 Dreamliner.

This delivery is the first of 27 Dreamliners for Air India. The airplane is equipped with 18 business class seats and 238 economy class seats.

The 787 has the range and capability to allow Air India to deploy the Dreamliner on many routes including the Middle East, Europe, Asia and Australia.

"We are pleased to celebrate another historic moment in our nearly seven-decade long relationship," said Dinesh Keskar, senior vice president of Asia Pacific and India Sales for Boeing Commercial Airplanes.
 

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