identify and explain two ways air India could achieve internal growth?
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Answer:
In this second extract from the CAPA India Aviation Outlook 2013/14 we look at the growing challenges to flag carrier Air India’s business model.
A combination of stronger Indian competitors as a result of foreign airline investment, the growth of LCCs, the opening up of the international market in the form of bilateral liberalisation and the changing nature of global alliances, will impact each of the three key areas of Air India’s operations – long-haul international, regional international and domestic – each of which we will consider in turn below.
1. Key issues for Air India’s long-haul operations
Etihad investment expected to accelerate Jet Airways’ international expansion
Despite the unfortunate complexity of entering equity transactions in India, there remains a strong likelihood that Etihad will acquire a substantial minority share in Jet Airways, to accompany the increasingly close working relationship the two are developing. The potential infusion of cash would be a major positive for Jet and will likely accelerate its domestic and international expansion plans. Jet Airways currently has a widebody fleet of 23 aircraft (13 A330s and 10 777-300ERs) of which five 777s have been sub-leased to Thai Airways, leaving an operational fleet of 18 aircraft.