Current Events
India's Flagship Carrier Air India Takes a Nose-Dive
PRESS TRUST OF INDIA
New Delhi, India
Air India has been grappling with huge losses for the past few years.
The airline has shut its booking offices in Zurich (Switzerland), Chittagong (Bangladesh), Vienna (Austria) while the process is on for closing down its offices in Cairo (Egypt) and Tehran (Iran).
The booking offices in Chittagong and Vienna were closed down in November 2014, while the office in Zurich was shut in October 2014.
In further steps to downsize their operations, loss-making Air India has shifted its offices in Washington, Los Angeles and Amsterdam to less expensive premises, saving thousands of dollars every month in rentals.
India’s national carrier has embarked on restructuring of overseas offices as part to its overall cost-cutting measures.
The airline's decision to shift its Washington office from January this year has brought down its monthly rental expense by more than $2,500.
"The (Washington) office has been shifted to new premises with effect from January 1, 2015. The current rent of the premises is $2,495. Air India earlier had office premises with a monthly rent of $4,542 plus $500 for parking space.
"Shifting the office to the new premises has achieved substantial savings," India’s Minister of State for Civil Aviation Mahesh Sharma informed his country’s Parliament last week.
For the new premises in Los Angeles, the carrier is paying little over $1,474 per month. At the old location, the monthly rental was $1,974.
With a saving of $500 per month, the carrier began operating from the new location since June 2014.
With regard to Amsterdam, the monthly office rental is now 1,520 euros while for the old premises the carrier was shelling out 3,611 euros per month.
According to Sharma, Air India's Washington office raked in Rs 1.904 billion revenues last fiscal. During the same period, revenues from Los Angeles and Amsterdam offices stood at Rs 1.1645 billion and nearly Rs 200 million, respectively. (Roughly, Rs 62 = US $ 1)
Besides, a committee is looking to address issues of downsizing the carrier's Toronto station and the process is in the final stages, the Minister noted.
In 2013-14, Air India incurred a loss of Rs 62.8 billion, higher than Rs 54.9 billion seen in the previous fiscal. This has been on account of multiple factors, including high operating cost environment.
March 9, 2015
Conversation about this article
1: Jasbir Kaur (Los Angeles, California, USA), March 09, 2015, 10:57 AM.
I refuse to fly Air India, and haven't for years. With this latest news, it would be asking for trouble if anyone bought a ticket on an Air India flight -- airlines in such situations don't give any advance warning when they go belly-up and leave passengers stranded and fending for themselves no matter where they are stuck mid-journey in the world.
2: Brijinder Singh (Gugaon, India), March 09, 2015, 11:18 AM.
A $500 monthly saving in L.A.? A full $2500 in savings every month in Washington, DC? Who are they kidding? They steal billions from concocted arms purchases every week, and yet they stand up in parliament and tell us about these nickle-and-dime savings as if they matter? Air India is but the tip of the iceberg. Every public institution in this country is on the same trajectory. And the fact that we now have more billionaires than ever before -- a few hundred of them, I'm told! -- isn't going to save anybody on this Titanic. The band is playing, though, true to form. (I'm surprised they haven't banned this story from the media yet ...)
3: Harinder Singh (Punjab), March 09, 2015, 11:26 AM.
India looks like it is moving from a socialist democratic society to an oligarchic society where wealth and power will be concentrated in the hands of a few.
4: Kaala Singh (Punjab), March 09, 2015, 12:21 PM.
Here is a bit of history about Air India. It was a successful private company owned by the Tata business group. Air India was nationalized by Indira Gandhi along with many other privately-owned companies, including a Sikh-owned bank which was the most promising one in the country -- the Punjab and Sind Bank. Why did she do that? I leave it to your imagination! There are many more exploits of the Nehru-Gandhi dynasty in the business arena (their exploits vis-a-vis the Sikhs are well known), but that is another story for another day.
5: Kulvinder Jit Kaur (Niagara Falls, Ontario, Canada), March 09, 2015, 12:57 PM.
Usually people feel a sense of pride flying in their national airlines but to my knowledge most people of Indian origin settled outside of India prefer other airlines to Air India. Their main concern is regular and appropriate maintenance of the carriers. "The way you do anything is the way you do everything." Looking at the state of affairs in other sectors, it does not inspire confidence in people to travel Air India. There are several other airlines with airfares suitable for all budgets. I absolutely don't see any reason for anyone to travel Air India. They may as well wrap it up.
6: Ujjagar Singh (Texas, USA), March 09, 2015, 2:03 PM.
Ever since Indian government operatives blew up an Air India plane in 1985 and blamed the bombing on Sikh separatists, one would have to be a really stupid Sikh to fly on Air India ever again. With a substantial portion of the overseas travel market in Sikh hands, is it a surprise that India's national airline is hemorrhaging billions of dollars which could've otherwise gone into politicians' pockets? Add to that India's trade-mark corruption, what chance in hell does Air India have in staying in the skies?
7: Kiran Kaur (Illinois, USA), March 09, 2015, 2:24 PM.
Air India's new premises -- remember, it's an airline and part of the service and travel industry -- in Los Angeles carries a monthly rent of $1474? Then it must be a room in a basement somewhere. Mighty good that's going to do for drumming up business! There's something really, really weird going on here; there's got to me more than meets the eye. A new scam of some desi kind, I bet.
8: Kaala Singh (Punjab), March 09, 2015, 11:44 PM.
It is important to understand how the Congress managed to stay in power in India for 50 years without doing anything for the people of India and only bringing murder and mayhem to the country. It established alliances with certain dominant caste and religious groups across the country by paying them huge sums of money. These people would then act as henchmen for the Congress to garner votes and crush any dissent and terrorize people into voting for the Congress. The money was obtained by nationalizing companies like Air India. Do we ever wonder why the Indian government -- then and now -- keeps pouring huge sums into Air India, despite it being a loss-making sieve of an airline for several decades now? These comapanies also acted as vehicles to swindle money. Also, employees of such companies are relatives or henchmen of the politicians who draw handsome salaries without doing anything. Same is the case with the Railways and other PSUs (Public Sector Units). Another example is the DRDO (Defence Research and Developmemt Organization) which consumes huge sums of money without doing anything. Massive scams during the previous Congress government(Commonwealth Games, Spectrum, Coal, Defence contracts) were nothing but plundering money which also helped the Congress stay in power, but the common people by that time were so fed-up with the Congress that it had no chance in the recent elections. In my opinion, if Congress stays out of power for 10 years and does not have access to the public cash reserves, it will become extinct. Of course, now we are stuck with an even greedier and more corrupt bunch to grapple with, but that's another story!
9: Baidyanath Mishra (New Delhi, India), March 10, 2015, 10:50 AM.
Shortly, Modi and his gang will have been at the helm for a whole year. They've been busy buying arms and dividing up the spoils that come from such mega-deals. No time to build this country's institutions. No wonder their only action vis-a-vis Air India is to begin dismantling it, instead of repairing it. I suspect it won't be long before they'll sell it to one of their cronies for pittance, just you watch.
10: Taran Singh (London, United Kingdom), March 10, 2015, 7:30 PM.
Me too! I refuse to fly Air India. I do not need to see the sari-clad OAPs who give such an attitude when they see their own countrymen ....
11: Kaala Singh (Punjab), March 10, 2015, 10:35 PM.
Air India has been reduced to a personal taxi-cab service for Indian politicians who never pay. Also, these guys never arrive on time and that is the real reason why the flights are always delayed and not the technical snags as announced.
12: Balaji Tripathi (New Delhi, India), March 12, 2015, 7:13 PM.
A recent news report here on "Tehelka TV" began with the words: "Your next flight on Air India might be your last!" or something to that effect. A lengthy news report described how many of the pilots on Air India today (and other Indian airlines too) have fake pilot licences which were acquired through bribery and influence, not through the normal process of training and testing. Worse still, Air India knows exactly which pilots have no flight training -- from the revelations in the media, if not otherwise -- but have still not grounded those pilots. There are, it is reported, about 4000 such pilots flying around the country. Still want to fly Air India? Or any other airline in India? Be my guest! I'm sticking to the bullock cart for a while longer ...