Comments
Industry experts say it is a long road ahead for the Tatas to turnaround Air India. The airline has lost almost three per cent of the market share in the past six months. In January, it had a market share of 10.2 per cent, which dropped to 7.5 per cent in June, and lost most of its market share to Vistara. On the other hand, the passengers carried by Air India between January and June recorded an increase of 19 per cent on average of the passengers it carried.
But Industry experts aren’t worried. According to most of them, they’d give a benefit of the doubt to the Tatas. The Tatas reentered into the airline market in 2013 with Vistara and AirAsia India. For almost a decade now, they have been carefully and closely observing how an LCC-AirAsia India and an FSC-Vistara have been operating. Tatas are now ready to play the bigger innings, and the purchase of the divested Air India airline is a testimony, Ram Shankar, Independent aviation expert explained.
Experts say that being a full-service carrier, Air India could possibly increase average fare. However, “though Air India was acquired by the Tatas, the product and the crew remain the same. Over the years, the quality has deteriorated, and it needs improvement”, explained a senior aviation analyst requesting anonymity. On the flip side, though, experts are betting on Air India’s fleet expansion strategy to be a huge game-changer, “which could support Tata’s negotiation scale in fuel, maintenance, aircraft leasing, landing and parking fees, airport charges for commercial offices and technology licences”, Shankar explained.
Another major achievement for Air India, according to one of the persons quoted above, is the voluntary retirement scheme. According to reports, over 4,500 employees of Air India have opted for the scheme. The person explained: “This reduces a lot of dead weight from the company. Eventually, it will make space for deserving candidates.”
Speaking about the way forward for Air India, a person explained that the Tatas are aware of the scale of corrections they need to make. “Over the next two years, I see a lot of consolidation, shedding of dead weight and negotiations, along with expansion. The current focus is on revamping the company and its product than the market share, so I don’t see it affecting the Tata management much.”
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.