32,000 feet and Rs. 17,000 Crore in debt

What is the national carrier of India – Air India. Compared to other carriers around the world Rs. 17,000 CR (USD 3.5 billion) in debt is not so bad but when you realize their fleet size is small it starts to add up.

Air India recently announced 4 new member to their Board of Directors, most notable is Anand Mahindra who runs Mahindra and Mahindra. In addition, over the past 4 months there have been numerous articles printed about how Air India is going to move forward and change – bullsh@$#.  I think Air India is too unionized and stuck in the government worker mentality. It needs to streamline their organization but no one has the political will to do that. I would love to know how many of the seats are given to political people and their families…again another line item that no one wants to touch.

The merger of Indian Airlines and Air India was another disaster in the making. Indian Airlines handled all the domestic flights while Air-India was the international arm. Many say the merger was done to hide the loses of Indian Airlines and bury them into the books of the newly merged entity which is officially called The National Aviation Company of India (NACIL).

So what needs to get done?  The first step is to start privatizing the carrier just like Lufthansa (article on Lufthansa privatization) and British Airways (BA article) did. This would force the carrier to shed some employees and start to be more competitive. But, I’m sure NACIL will hire a consultant like McKinsey or Accenture and then put the blame of the decisions on the consulting company – business as usual for Air India.

P.S. The 32,000 feet in the blog title does not refer to the cruising altitude but the number of employees – 16,000 😉

3 thoughts on “32,000 feet and Rs. 17,000 Crore in debt

  1. sunny says:

    The debt just got multiplied with the European volcanic fiasco. Ironically Jet operated many flights through Egypt and hence has losses much lesser than NACIL. Kingfisher also has created a huge inventory of empty seats which it will sell at premiums. I guess stealing Air India from the Tata's was a big mistake.

  2. sunny says:

    The debt just got multiplied with the European volcanic fiasco. Ironically Jet operated many flights through Egypt and hence has losses much lesser than NACIL. Kingfisher also has created a huge inventory of empty seats which it will sell at premiums. I guess stealing Air India from the Tata's was a big mistake.

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