Tuesday, February 2, 2010

Air India To Separate Freight Operations By April

Troubled Carrier to split Passenger and Cargo Sectors
Shipping News Feature

INDIA – In October we reported on the problems of national carrier Air India which lost several hundred million dollars last year and was plagued by staff disputes including hunger strikes by unpaid workers. The whole sector suffered as Air India abandoned its plans for a low cost carrier and now the company has reacted by announcing the separation of freight and passenger carriage.

By April the airfreight arm will be run as a separate entity. Shipping cargo represented around 8% of Air India’s turnover last year but the company recently suspended its freight services to Europe and Japan as it found them unprofitable. Other carriers filled the gap but Air India believes that an aggressive cargo only campaign can regain the markets and say they will operate services again this year.

Air India has been subject of much speculation as to its future. The Government has long felt it could not allow the airline to fail and appointed the State Bank of India to review the carrier’s future in July last year. This separation of services is likely to be a direct result of the Banks Capital Markets division investigation and recommendations.

At the time of writing nobody at Air India was available for comment.