Beleaguered Air India is seeking another $309MN from the Indian government to pay off vendors, further scaring away potential investors.
The Indian government, which currently owns a 76% stake in Air India, has been actively courting investors to buy its stake. Thus far, no one has stepped up. And is it any wonder when the airline cannot survive without constant bailouts (and is not even surviving all that well…)? Remember, this is not the first bailout in 2018. Air India received about $100MN earlier this year as well from the national government.
But the government has no plans to stop the flow of money. Air India is a huge source of employment and national pride and will not go under. But Reuters reports that three banks and two aircraft leasing firms served default notices on Air India last month. More banks are on the brink of doing the same.
Consider this airline a textbook example of mismanagement and a spotlight on the peril of propping up a national airline. While the debtors will be paid back, it is the Indian people who are suffering the consequences of such mismanagement.
Air India has a great route network and is a key Star Alliance partner for connectivity on the Asian subcontinent. I am rooting for Air India to flourish. But frankly I don’t see how. Air India seems destined, like her sister Alitalia in Italy, to be fundamentally unable to reach profitability.
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