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Air India Privatisation…Good Idea?

Start privatization with Air India

The Economic Times, May 10

The article strongly advocates the privatisation of Air India.


The privatization of Air India is a complicated issue and it would be unfair to respond with a quick ‘Yes’ or ‘No’ without deliberating the pros and cons.


  • Latest data shows signs of improvement in recent years
  • Operating loss has been reduced to Rs2,636.19 crore in FY15 from Rs5,138 crore in FY12
  • A big country like India needs an airline for connecting remote locations with poor seat occupancy ratio
  • As a state-run enterprise, Air India continues to run on many loss-making routes
  • Aircraft availability and more aggressive marketing have improved Air India’s performance and image
  • Low air turbine fuel (ATF) prices have also reduced costs
  • Air India has also plays an important role in crises, such as in the evacuation of Indians from Yemen in 2015 under Operation Rahat

A look at above facts show that any abrupt decision to privatise the national carrier is best avoided. Instead, waiting till the recovery is consistent and visible could be a win-win for both Air India and the state.


  • Improved operational performance
  • Operating loss reduced to Rs2,636.19 crore in FY15
  • Aircraft availability, more aggressive marketing
  • Low ATF reducing costs
  • Plays an important role in crises

As part of the turnaround strategy for Air India, a number of steps have been initiated to cut costs and losses. The airline has also been improving its operational and financial performance.