This is a reproduction of the column "Lunch with BS". Yet it makes for interesting reading, profiles a quiet achiever and showcases a CEO who otherwise might have been lost in the razzle and dazzle of the glitz that media loves so very much. Hats off to a man who is willing to sit down with safai karmacharis and persuade them to return to work. I am sure he can coax performance into this airline. The huge and unwieldy human resources need to be re-oriented before the debt burden can be managed.
the best means of raising money is going for a huge IPO and killing indian railways especially brands like garib rath, shatabdi, rajdhani, durontos etc. these are the passengers who can convert to fly. buy large aircrafts like airbus 380 and increase capacity to lift people on extremely busy sectors like mumbai-delhi and other metro cities. Unless you bring passengers at reasonable rates you'll be in loss. govt interference has to come down. govt is just interested in dividend and nothing else. infact they should pay off all the debt in one go and help in bringing in IPO of around 2 lakh crores. That will be sufficient to wipe of all debt and leave enough money for operations and provide airlines a war chest to compete with big players. But our govt is interested in selling everything to pvt companies so why will they ever think of this?
Re: go for a huge IPO
by bakchod on Mar 28, 2017 09:17 AM
Why should taxpayers pay 45000 crore to pay off the debt? And you are joking about 2 lakh crore IPO. Indigo Airlines which is the largest airline in the country (1.5 times more passengers than Air India) and is consistently profit making has a market cap of only 38,000 crore. No one will give more than 25,000 crore for Air India IPO even after the full debt is paid off. Stop dreaming. Indigo Airlines is paying income tax to the government. Air India is wasting the money paid by taxpayers with huge losses. Lohani has done a good job. But once he turns it profitable, it should be immediately sold off even for 3-4 thousand crore so that the debt is transferred to private airline. Currently even after improvement under Lohani, Air India is not able to make enough profit to pay the interest on its debt also, forget about paying the principal. At this rate it will take 20-30 years to pay off the debt if Air India is run professionally. Until then the taxpayers will have to bear the burden of Air India.
