A FAMOUS brand in the world’s fastest-growing aviation market, sitting on valuable slots at international airports and able to borrow cheaply thanks to being state-owned: Air India ought to be hugely profitable. But under state ownership it has guzzled public funds as hungrily as its jets consume kerosene. Last week the authorities threw in the towelette and announced an “in principle” cabinet agreement to privatise it. The chances of that going ahead rose on June 30th when IndiGo, a well-run private low-cost carrier, said it wanted to bid.
Whoever seizes the controls can expect a hard task. Air India has struggled since private rivals were first allowed in 1994 to fly in India’s skies. Together with Indian Airlines, another state-owned carrier with which it merged in 2007, it has a domestic market share of just 13% and is shedding one percentage point or so every six months. A bail-out of 300bn rupees ($4.7bn) agreed in 2012 was meant to stop losses, but has…Continue reading