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Graphic shows revenues and losses since Indian government merged profitable domestic Indian Airlines with loss-making international arm, Air India, in 2007.
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BUSINESS

Modi government approves sale of Air India

By Duncan Mil

June 27, 2017 - Prime Minister Narendra Modi’s cabinet has signed off on a plan to sell all or part of loss-making, state-run carrier Air India. It now has more than $8 billion of debt – equivalent to the value of the company.

Air India was founded in 1932 as Tata Airlines by Jamsetji Tata, before being nationalised in 1953. The government merged domestic Indian Airlines with Air India in 2007 — a controversial decision currently being probed by the Central Bureau of Investigation (CBI).

Since the merger, the airline has struggled to keep up with cheaper no-frills rivals and has made pre-tax losses for eight years in a row. Air India's share in the domestic aviation market has shrunk to just 14.1 percent — a distant third behind high-flying Indigo (39.8%) and Jet Airways (15.5%). On the international sector, it still has a significant share of 25 percent but continues to lose heavily on these routes.

Air India made an operating profit of about 1 billion rupees ($15.5 million) in the year through March 2016 — principally due to a slump in oil prices — but posted a net loss of 38.4 billion rupees ($595 million), according to the government.

Sources
PUBLISHED: 12/07/2017; STORY: Graphic News
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