INDIA: Indian gov’t considers further AI cash injections

The Indian government may pump another US$450 million into Air India in a bid to revive the ailing state-owned carrier, Aviation Minister Praful Patel said recently. The government injected eight billion rupees ($180 million) into the airline in the last fiscal year to March 2010 and already expects to put in another 12 billion rupees […]


The Indian government may pump another US$450 million into Air India in a bid to revive the ailing state-owned carrier, Aviation Minister Praful Patel said recently. The government injected eight billion rupees ($180 million) into the airline in the last fiscal year to March 2010 and already expects to put in another 12 billion rupees this year. “We can look at pumping in another 20 billion rupees ($450 million dollars) later,” he added. The airline’s one-time dominance of India’s skies has been eroded by a swath of new private airlines and agreements that have allowed more foreign carriers to serve the country. But Patel said Air India’s fortunes were improving thanks to a growth in air traffic after the global financial crisis sent the sector into a tailspin and is targeting a profit by 2014-15. The airline, which merged with its domestic stateowned counterpart Indian Airlines in an attempt to cut costs, needs the money to modernise its fleet and take on fierce competition. The carrier has placed orders for 111 new aircraft – 43 from Airbus and 68 from Boeing – worth $11 billion. Air India is the third largest operator of domestic passenger services, with about an 18 per cent market share behind private airlines Jet and Kingfisher. Meanwhile, reports suggest that Air India’s entry into Star Alliance has been delayed – again – by issues relating to IT. The plan to join Star Alliance has been under consideration since 2008; and the carrier recently announced that will be joining the alliance by first quarter 2011. But it is being reported that the completion of the $190-million SITA migration for the Passenger Services System has been delayed. The airline is now looking at putting that in place by the first quarter of 2011. The snag has been in the integration of the two codes of Indian Airlines (domestic) and Air India (international), as they are on two parallel tracks.