Why Indigo is buying planes and Air India is on sale at almost the same revenue?
“Air India’s revenue for 2017-18 stood at Rs. 23,900 crores, almost the same as Indigo (23, 968 crores) and six times that of GoAir and yet it’s the government owned airlines which needs selling"
Air India’s revenue for 2017-18 stood at Rs. 23,900 crores, almost the same as Indigo (23, 968 crores) and six times that of GoAir and yet it’s the government owned airlines which needs selling. As per the official data Air India made losses of about 5,000 crores in the same period. And it’s not just Air India which is making losses. Indigo reported a net loss of 1,062 crores in Q2. However, the low cost carrier is not on sale unlike its compatriot.
In fact, Indigo is buying 300 aircrafts to replace some older ones. Indigo has plans to run ceaseless flights to distant world cities. Why is it so that two airlines with similar revenues are thinking so differently? Why one wants to expand and the other one wants to be sold? Why one sees possibility in the ever growing aviation market and the other is harbouring a losing mindset?
There can be various technical answers to the questions asked above. But simply put, Indigo is trying to develop a profitable model. There are people with will and wits involved with the low cost carrier. They are determined to explore every possible option. They are working on it. While the owners of Air India, the government just doesn’t want to try.
Where are the innovative strategies? Where is the restructured business model? Sell some aircrafts. Limit the number of destinations. Increase the fare. At least do something! On what basis the government has decided that Air India is doomed and there is no other option but to sell it?
Make no mistake. Air India is a national asset, the only airlines owned by the state. The brave crew of Air India has been involved in several rescue missions. Whether it was Kuwait or Yemen, Air India has proven time and again how valuable an asset it is for the country.
What if there is an emergency again tomorrow? Who has seen the future? How wise it is to totally rely on private airlines in these times of economic uncertainty? It’s incomprehensible why the government is on a selling spree. Why not hire the best talents and try pulling out Air India out of losses? Just like any private company would do!