Mayday! Air India’s market share crashes to lowest ever

Air India’s market share plunged to an all-time low of 11.8% in September even as the government-owned carrier grapples with a financial crunch, reports Arun Nayal in New Delhi. In January 2014, the carrier commanded a share of 19.8%. Although the domestic passenger market is growing at robust pace, the near-bankrupt Air India has slipped to the number four position behind low-cost carrier Spicejet, which repo-rted a 12% market share.

Interglobe Aviation, which flies under the brand name IndiGo, captured 43.2% of the domestic pie while Jet Airways reported a share of 15.8%. Air India’s domestic market share had dropped to below that of Spicejet in September 2017, or exactly a year ago; at the time its share was 13.5% passengers compared with Spicejet’s 13.8%.

Air India has a fleet size of 163 aircraft; this compares with 57 aircraft for low-cost carrier Spicejet and 69 aircraft for IndiGo. Though Air India’s market share has been on a continuous decline since 2014, the situation has been aggravated in 2018-19. The government had made an attempt to divest 76% stake in the Maharaja but the effort did not result in any transaction. During the same period Indigo has expanded from 28% to 43% market share.

Around 15 aircraft belonging to Air India remain grounded for close to two months now due to lack of funds for spares. The airline has found it difficult to meet its working capital requirements in FY19 and has, on occasion, reportedly delayed salaries to employees. The government had earmarked Rs 650 crore for Air India in the 2018-19 budget. Additional cash of Rs 980 crore was injected into the airlines operations after a failed disinvestment process. The government also granted the loss-making carrier Rs 1,000 crore from the National Savings Funds to meet its financial requirements.

Air India has a total debt of Rs 48,781 crore while its last reported losses, for FY17, stood at Rs 5,765 crore. Air India’s domestic market share has hovered around 13% in the first half of FY19; it was 13.3% at the end of FY18.

Air India