The disinvestment plans of national carrier Air India are back in news and the government is making all the right noises.
Making a case for the sale of the airline, union finance minister, Arun Jaitley said in Dialogue@DDNews programme, “In this country, if 87 or 86 percent flying can be handled by the private sector… then they can also do 100 percent.” Jaitley further said about Rs 50,000 crore of tax-payers’ money that has been pumped into the airline so far could have been invested to improve the education sector.
Indeed a valid point, especially considering India’s education budget has remained at a lowly 0.5 percent of GDP over the last few years.
What Jaitley said is by and large correct. A look at the air traffic data available from the Directorate General of Civil Aviation (DGCA) shows that Air India’s market share has been on a declining course. From 20.2 percent in 2013-14, the airline’s market share shrank to 17.8 percent in 2015-16. according to DGCA data.
Of the 10.38 crore passengers carried by Indian carriers in 2015-16, Air India accounted for 1.85 crore, Jet Airways 2.33 core and budget carrier IndiGo 3.31 crore. IndiGo has witnessed a steady increase in its market share from just 14.1 percent in 2010-11 to 32 percent in 2015-16.
Firstpost did an analysis of various parameters of three leading airlines in the country–Air India, Jet Airways and Indigo–in the context of Air India’s selloff plan. Air India and Jet Airways are full service carriers while IndiGo is a budget carrier that is making profit and by far the best performer in the sector.
06/06/17 Rajesh Pandathil and Kishor Kadam/First Post