News / Asia

Government to Give $173 Million Bailout to Air India

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

Video Five Patients Given Experimental Ebola Drug Said To Be Improving

Experimental drugs have been tried on six people: three Westerners and now, three African pyhysicians More

Video In Ukraine, Fear and Distrust Remain Where Fighting has Stopped

As Ukrainian military reclaims control of eastern cities residents rebuild their lives, but many say everyone is being treated with suspicion More

Video In Rural Kenya, Pressure Builds Against Female Circumcision

Girls learn to object; FGM practitioners face penalties from jail sentences to stiff fines 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.
Five Patients Given Experimental Ebola Drug Said to Be Improvingi
X
Carol Pearson
August 19, 2014 11:43 PM
The World Health Organization has approved the use of experimental treatments for Ebola patients in West Africa. The Ebola outbreak there is unprecedented, the disease deadly. The number of people who have died from Ebola has surpassed 1,200. VOA's Carol Pearson reports on the ethical considerations of allowing experimental drugs to be used.
Video

Video Five Patients Given Experimental Ebola Drug Said to Be Improving

The World Health Organization has approved the use of experimental treatments for Ebola patients in West Africa. The Ebola outbreak there is unprecedented, the disease deadly. The number of people who have died from Ebola has surpassed 1,200. VOA's Carol Pearson reports on the ethical considerations of allowing experimental drugs to be used.
Video

Video In Ukraine, Fear and Distrust Remain Where Fighting has Stopped

As the Ukrainian military reclaims control of eastern cities from pro-Russian separatists, residents are getting a chance to rebuild their lives. VOA's Gabe Joselow reports from the town of Kramatorsk in Donetsk province, where a sense of fear is still in the air, and distrust of the government in Kyiv still runs deep.
Video

Video China Targets Overseas Assets of Corrupt Officials

As China presses forward with its anti-graft effort, authorities are targeting corrupt officials who have sent family members and assets overseas. The efforts have stirred up a debate at home on exactly how many officials take that route and how likely it is they will be caught. Rebecca Valli has this report.
Video

Video Leading The Fight Against Islamic State, Kurds Question Iraqi Future

Western countries including the United States have begun arming the Kurdish Peshmerga forces in northern Iraq to aid their battle against extremist Sunni militants from the Islamic State. But there are concerns that a heavily-armed Kurdistan Regional Government, or KRG, might seek to declare independence and cause the break-up of the Iraqi state. As Henry Ridgwell reports from London, the KRG says it will only seek greater autonomy from Baghdad.
Video

Video In Rural Kenya, Pressure Builds Against Female Circumcision

In some Kenyan communities, female genital mutilation remains a rite of passage. But activists are pushing back, with education for girls and with threats of punishment those who perform the circumcision. Mohammed Yusuf looks at the practice in the rural eastern community of Tharaka-Nithi.
Video

Video For Obama, Racial Violence is Personal Issue

The racial violence in the St. Louis suburb of Ferguson is presenting U.S. President Barack Obama with an issue to which he has a deep personal connection. To many Americans, Obama's election as America's first black president marked a turning point in race relations in the United States, and Obama has made ending the violence a policy priority. On Monday he issued a new call for calm and understanding. Luis Ramirez reports from the White House.
Video

Video Clinton-Obama Relationship Could Impact 2016 Election

President Barack Obama and former Secretary of State Hillary Clinton have a long and complicated relationship. That relationship took another turn recently when Clinton criticized the president’s foreign policy. VOA National Correspondent Jim Malone reports there is renewed attention on the Clinton-Obama relationship as Hillary Clinton considers running for
Video

Video Iran Looks to Maintain Influence in Baghdad With New Shia PM

Washington and Tehran share the goal of stopping Syrian-based militants in Iraq. But experts say it's Iran, not the United States, that will most influence how the new government in Baghdad approaches internal reforms and the war in Syria. VOA State Department Correspondent Scott Stearns has the story.

AppleAndroid