Quite appropriate is the above comparison as this reflects the true condition of the India's commercial Airlines .Currently this is the third year since 2009 that IA has incurred huge losses In the current financial year 2010-12, the Indian airline industry will make a net loss of around Rs 12,500 crore against an estimated loss of around Rs 10,500 crore in 2010-11 and RS 9000 crore in 2010-2009.Its quite early to say about the figures but seeing the past performance and the current scenario I am quite sure that in this case the figures posted now shall be achieved full fledged or they might improve i.e it shall surpass the estimated figure
Now A days our daily dose of news comprises of scams and frauds in multiple crore figures ,but in this case there seems to be no scam or fraud so why is the aviation industry has posted for the losses consistently for the third year ?? India is a country of 1.2 billion people and people usually prefer to take the train route than the plane. With a powerful railway network at comparatively cheaper prices, the Indian Railway is the lifeline of the country. It is but a natural thing that people care more about Indian Railway passenger fares than the airlines. Airline is the only logical way to go abroad. Air India primarily caters to the foreign destinations Apparently there are n number of reasons for the same but as to what would be the real cause that has led to the huge public loss and finally who should be blamed for this huge mess the Aviation Ministry or the Government .The answers seems to be indefinate but the reality is that currently the Indian airlines is in a bad shape and need immediate attention and funds .The huge losses are because of high taxes on fuel and rising operational costs. Moreover, cutthroat competition in the sector prevents airlines from raising ticket prices,but on the other hand the private airlines are doing no better we can take up the example of the Kingfisher Airlines owned by the Liquor Baron Vijay Mallya ,who is trying hard to keep things up because its on the verge of lock out any day . In fact Kingfisher Airlines, as expected, has posted the heaviest loss among the listed carriers Other private airlines like Jet Spice have also posted huge losses .Quite unfair is this to the aviation Industry .The possible question that arises now is that What had gone wrong with the AI ?? and What now should be done ??
Essentially there is a need of strong recovery plan that could help to bail out the IA .Starting with the very basis the worth of the potential profitable routes should be identified and appropriate steps should be taken so that these routes are used to gain profits .Also there is a huge mismatch in the aircraft deployed and the potential of the traffic on that particular route .The study found that in the A320 family aircraft used on domestic routes were also bringing in losses. Eight such flights did not even meet fuel costs,68 others just met fuel costs but not the overall cash cost and 46 others were meeting cash costs but not total costs. For the same aircraft family being used on international routes, 17 such flights were only meeting ATF costs but not cash costs. This is quite critical as these flights are a sure shot loss investment because they might not be able to pay of there jet fuel prices because of the seats going empty What a waste of both the infrastructure and the potential .??. One more reason for the huge losses are because of high taxes on fuel and rising operational costs.Taxes constitute 40% of an airline's total expenditure against the global average of 32%.This seems to me a total lack on the aviation ministry part.Had there been a proper record and audit the IA might have been able to meet the operational costs .
Interestingly are the so called reasons given or stated but to me this seems to be a sort of decoy to escape the real reason behind the mess.Poor performance was due to lack of freedom in deciding aircraft deployment; foreign carriers getting multiple points of access within India and carrying away traffic; and Indian private airlines concentrating on Delhi International Airport as an international hub.To sum up all the above the Indian Airlines Blame every body else for its losses and blunder except itself .Prior to liberalization the IA had the monopoly over the profitable routes but now it faces a tiff and stern competition with the private airlines in domestic as well as in international routes .
Its true that the business of airlines is a very profitable if managed ,governed and improvised effectively.For several reasons only few public sectors in India show profits ,rest all are either in loss or die in scam .Looking at the current situation i can probably say that now only few options are left with the GOV .Simple bail out package will not do in this case as it is not similar to the Satyam scam Perhaps one might be the Privatization of the IA . This was a huge success in case of the the British Airways which is now a world airline .The other solution might be to go with the FDI Policy that the GOV has proposed.Till now I was a strong Non-Supporter of this policy but now it seems that this might be the only cure or rather I should say only way to bail out IA
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