Air India could become an LCC
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Air India will have to drastically restructure its existing operations, possibility including adopting a low-cost carrier (LCC) business model, if it is to survive. This, The Times of India reported, was the dramatic outcome of a meeting held between India’s Prime Minister, Manmohan Singh and senior officials from India’s Aviation Ministry, who have told the national carrier that it will only be granted extra funding if its sheds all unnecessary costs and transforms itself.
“Unless a series of measures are taken to improve the airline, it will not be possible for the government to keep supporting in unconditionally. This is one last chance Air India has got,” India’s Aviation Minister, Praful Patel, was reported saying.
Patel went on to say that LCCs are the only airlines currently seeing good load factors, and that Air India may have to consider this type of operation to secure its long-term future.
“Indian carriers will have to redefine their business models. If someone has a capacity that can’t be supported by a full service model, what choice does he have?” Patel said.
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