The Indian aviation scene has been having a tough time during the past couple of years. The two big carriers, Air India and Jet Airways (we reported) are plagued with financial problems and diminishing passenger and cargo figures.
Is Air India also going to collapse?
Jet Airways has more or less ceased operations and there seems to be little hope that they will revive, or that there will be an offer from someone to take over the financial burden.
Air India, which has been in trouble for a long time and has only survived because of government intervention, now seems to be following Jet Airways down the drain.
Their survival seems to hang on the outcome of the elections in India which will be held on May 19th. It is by no means clear as to whether a new government will continue supporting Air India which has amassed around €1.3 billion in debts in the meantime. However, the current Modi administration – if re-elected – has assured that the national carrier, unlike a private airline like Jet Airways, will by all means be kept in the air.
Air India, once the pride of Indian aviation, is in a sorry mess and has been forced to ground a number of their aircraft as they have no money to pay for spare parts or necessary maintenance work.
Efforts to privatise the national carrier have failed and were finally put to rest last summer.
Passenger and cargo support low
Air India’s portion of the Indian air cargo market has reduced dramatically from year to year as shippers and consignees alike have lost faith in the carrier. Foreign airlines have taken the lead and the lions share of the air cargo market, predominantly Gulf carriers such as Emirates, Etihad and Qatar Airways. Air India has no own freighter feet and by reducing capacity on long haul routes, they are losing even more ground in the cargo market.
The only hope it seems is that the new government will continue to bail them out. But this is basically just ‘a barrel without a bottom.’ There are quite a few loans due for repayment this year, but Air India does not have the cash to pay their debts. One way would be for them to cut operations even further, ground more aircraft and get cash to repay on loans.
Patience is running out
A further hiccup is the fact that even more cost has been added to flights on international routes to Europe and the USA by the closure of Pakistan’s airspace to them because of the ongoing border conflict. This has meant more cost by having to reroute flights on lengthier tracking.
It’s hard to believe that India would allow its national carrier to bite the dust. However, it seems that there are some in the finance ministry who have had enough of pouring money out the window.
John Mc Donagh