India's Civil Aviation Minister Vayalar Ravi, in a written reply to Parliament, stated Air India is estimated to report a loss before tax of INR69.94 billion (USD1.6 billion) in FY2011 (Reuters/PTI/IANS/The Hindu, 03-Jul-2011). Mr Ravi blamed rising fuel costs, high interest rates, rising yields and a high employee-aircraft ratio (263 employees per aircraft) for the estimated provisional result. "The turnaround plan submitted by Air India envisages substantial equity support," he said. A panel of ministers has been holding meetings to discuss infusing equity into the loss-making carrier and is reportedly in the process of preparing a note to the federal cabinet. "The financial position of Air India is being intensively monitored by the government. The turnaround plan and with financial restructuring plan of Air India is presently being examined," Mr Ravi said. Air India is also in talks with banks to restructure USD4 billion of working capital debt and is implementing a turnaround plan which would focus on a hub-and-spoke route model, reduce costs by redeploying staff and divest non-core real estate. The airline has failed to post a profit since merging with Indian Airlines in 2007 and relies on government cash infusions to survive.
Air India losses for FY2011 estimated at USD1.6bn
You may also be interested in the following articles...
Australia-India air travel market grows rapidly but SE Asian hubs hinder nonstop services
The Australia-India market has experienced rapid growth over the last three years, prompting Australia to lobby for more direct services. Visitor arrivals from India are up 50% since mid-2013, and total passenger traffic between the two countries is up approximately 30%.
Air India launched services to Melbourne and Sydney in 2013 but the Australia-India market is still dominated by Southeast Asian flag carriers. Singapore Airlines has been able to maintain a leading 41% share of the market. Malaysia Airlines also still carries more Australia-India passengers than Air India.
Attracting more nonstop flights from Air India, or the possible launch of nonstop flights to India by Australian carriers, will not be easy despite growing demand. Southeast Asia’s network airlines have a competitive advantage as they serve several gateways in both Australia and India. Southeast Asia’s growing medium/long haul LCCs have also started to compete in the Australia-India market and are well positioned to take a large share of the anticipated growth.
India’s aviation market surges 20% on economic growth and low fuel prices
Indian aviation is, after many years of promise, seemingly starting to deliver on its potential. It is currently the fastest-growing major aviation market in the world. With strong GDP growth of around 7.5% India is surging ahead of China in the economic growth stakes.
Meanwhile, the decline in oil prices has supported lower fares, driving year-on-year domestic traffic growth in excess of 20%. Its airlines are even starting to make money.
LCC, IndiGo, established less than a decade ago, has become the dominant player in the domestic industry. At the end of the Indian financial year, on 31-Mar-2016, IndiGo was the largest airline in the domestic market with a passenger share of 38.4%, followed by Jet Airways at 20.2%. LCCs accounted for 61.7% of domestic traffic.