News / Asia

Government to Give $173 Million Bailout to Air India

TEXT SIZE - +

The Indian government will give a $173 million bailout to its ailing national carrier, Air India, which has piled up massive losses. However there are concerns that efforts to revive the airline may not succeed.

Indian government officials say the cash infusion for Air India will be made in two phases. The funds being given are part of a larger financial aid package that is expected to help the state-run airline get back on its feet.  

The Indian government will give a $173 million bailout to its ailing national carrier, Air India, which has piled up massive losses. However there are concerns that efforts to revive the airline may not succeed.

Air India has promised to restructure the company and go in for a major cost cutting program. Officials say the loss-making airline will reduce its fleet from 146 to 105 aircraft and save nearly $200 million in other costs over the next year.

The airline has been struggling in recent years, and has piled up losses of $875 million in the financial year that ended in March 2009. It was a year when the global recession reduced business for most airlines around the world.

But experts say Air India's problems are not just linked to reduced passenger traffic during the global economic downturn. Aviation experts say the airline can only turn profitable through some tough measures, such as drastically reducing its 30,000 plus staff.  But lay-offs are a politically sensitive issue.

Sanat Kaul, a former top official in the civil aviation ministry, says it will not be easy for the airline to take the steps needed to turn it around because it is a state run company.   

"You have to reengineer the airline. But there is a problem with the normal public sector environment in which Air India is working. Public sector environment with all sorts of rules, regulations, parliamentary committees breathing down their neck it may not be possible. There are traditions in Air India there are union agreements in Air India, so all these things have to be looked in," said Kaul.  

The problems that Air India might face in trying to restructure became apparent last year when efforts to cut pay incentives of pilots had to be abandoned after they staged a strike. The strike was called off after the government intervened.

The government says it is hopeful that the airline will emerge from the current crisis it faces. However many see Air India as an example of India's failure to reform state-run companies, and there have been calls to privatize the airline.  

Founded before India became independent, the airline was a source of national pride, and was nearly dominant for decades before the civil aviation sector was opened to private airlines. But after India opened its skies in the 1990s, Air India found it difficult to compete, and saw a steady decline in its market share.

You May Like

Multimedia Anti-Keystone XL Protests Continue

Demonstrators are worried about pipeline's effect on climate change, their traditional way of life, health and safety More

Thailand's Political Power Struggle Continues

Court gave Prime Minister Yingluck Shinawatra until May 2 to prepare her defense over abuse of power charges but uncertainty remains over election timing More

Malaysia Plane Search Tests Limits of Ocean Mapping Technology

Expert tells VOA existing equipment’s maximum operating depth is around 6 kilometers as operation continues on ocean bed for any trace of MH370 More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Pet Kangaroo Helps Spread Environmental Messagei
X
Penelope Poulou
April 22, 2014 5:53 PM
Children’s author Julia Heckathorn travels the world to learn about different ecosystems and endangered animals. She pours her knowledge into children’s books, hoping the next generation will right the environmental wrongs of our times. As in many children's books, the main character in Heckathorn's stories is an animal. Unlike those other characters, though, this one is real - a kangaroo, that lives in the author’s backyard. VOA’s Penelope Poulou has more.
Video

Video Pet Kangaroo Helps Spread Environmental Message

Children’s author Julia Heckathorn travels the world to learn about different ecosystems and endangered animals. She pours her knowledge into children’s books, hoping the next generation will right the environmental wrongs of our times. As in many children's books, the main character in Heckathorn's stories is an animal. Unlike those other characters, though, this one is real - a kangaroo, that lives in the author’s backyard. VOA’s Penelope Poulou has more.
Video

Video Pro-Russian Separatists Plan 'Federalization Referendum' in Eastern Ukraine

Pro-Russian separatists in eastern Ukraine say they plan to move forward next month with a referendum vote for greater autonomy, despite the Geneva agreement reached with Russia, the U.S. and Ukraine to end the political conflict. VOA's Brian Padden reports from the city of Donetsk in Eastern Ukraine.
Video

Video Pope Francis Hopes Dual Canonizations Will Reconcile Church

On April 27, two popes - John the XXIII and John Paul II - will be made saints in a ceremony at St. Peter’s Square. VOA religion correspondent Jerome Socolovsky says the dual canonization is part of the current pope’s program to reconcile liberals and conservatives in the Roman Catholic Church.
Video

Video In Capturing Nature's Majesty, Film Makes Case for Its Survival

French filmmaker Luc Jacquet won worldwide acclaim for his 2005 Academy Award-winning documentary "March of the Penguins". Now Jacquet is back with a new film that takes movie-goers deep into the heart of a tropical rainforest - not only to celebrate its grandeur, but to make the case for its survival. VOA's Rosanne Skirble reports.
Video

Video Boston Marathon Bittersweet for Many Runners

Monday's running of the Boston Marathon was bittersweet for many of the 36,000 participants as they finished the run that was interrupted by a double bombing last year. Many gathered along the route paid respect to the four people killed as a result of two bombings near the finish line. VOA's Carolyn Presutti returned to Boston this year to follow two runners, forever changed because of the crimes.
Video

Video International Students Learn Film Production in World's Movie Capital

Hollywood - which is part of Los Angeles - is the movie capital of the world, and many aspiring filmmakers go there in hopes of breaking into the movie business. Mike O'Sullivan reports that regional universities are also a magnet for students who hope to become producers or directors.
Video

Video Pacific Rim Trade Deal Proves Elusive

With the U.S.-led war in Iraq ended and American military involvement in Afghanistan winding down, President Barack Obama has sought to pivot the country's foreign policy focus towards Asia. One aspect of that pivot is the negotiation of a free-trade agreement among 12 Pacific Rim nations. But as Obama leaves this week on a trip to four Asian countries he has found it very difficult to complete the trade pact. VOA's Ken Bredemeier has more from Washington.
Video

Video Autistic Adults Face Housing, Job Challenges

Many parents of children with disabilities fear for the future of their adult child. It can be difficult to find services to help adults with disabilities - physical, mental or emotional - find work or live on their own. The mother of an autistic boy set up a foundation to advocate for the estimated 1.2 million American adults with autism, a developmental disorder that causes communication difficulties and often social difficulties. VOA's Faiza Elmasry reports.
AppleAndroid