COVID-19 impact: Air India needs to have a plan B, says Kapil Kaul of CAPA India

Air India needs to have a Plan B to continue operating, as the COVID-19 led disruption has delayed its planned divestment, said Kapil Kaul, CEO of aviation advisory firm CAPA India.

Kaul, addressing a webinar on June 26, said there will be hesitation among interested airlines or investors to commit capital in an environment where demand has collapsed and there is question mark on the viability of airline operations.

Instead, the government should look at a Plan B that will lead Air India to a post COVID-19 scenario, when the divestment process can resume.

"How do I make the airline smarter, get professional management, redesign the company and reduce costs, these are the things that the government should look to do meanwhile," Kaul said.

Air India incurs a loss of up to Rs 30 crore a day, and has been surviving because of government largesse.

The government had already postponed the deadline to submit bids for the national airline by two months, to June 30. But there is little chance for the carrier to get any interest, especially when airlines across the world are filing for bankruptcy.

Civil Aviation Minister Hardeep Sigh Puri though has been optimistic about Air India's chances, especially after dominating the Vande Bharat Mission exercise.

Puri said he wasn't more sure of the process being successful, than he is now. "I have never been as hopeful or optimistic about Air India divestment as I am now," the minister said. He added that the Vande Bharat exercise has shown that the airline has the required resources -- pilots, routes, destinations and fleet - to attract investors," the minister had said.