Privatization of Airways in India

SARTHAK SHARMA
BBA BATCH 2020-23
LAL BAHADUR SHASTRI INSTITUTE OF
MANAGEMENT AND TECHNOLOGY ,BAREILLY
Agenda
 Meaning Of Privatization
 Why Privatization
 Privatization In Airways
 Airways : Before And After Privatization
 Its Impact On Economy
 Conclusion
Meaning Of Privatization
 The transfer of ownership, property or business
from the government to the private sector.
is termed Privatization.
(THE ECONOMICS TIMES )
 It was introduced in 1991 under the
leadership of P. V. Narasimha Rao.
Why Privatization ?
 To reduce government involvement in commercially
viable activities.
 Increase efficiency in the delivery of programs
and services.
 Provides competition in market place.
 To generate employment.
Overview of Airways (AIR INDIA)
 1991: Conducted first flight in India between Karachi and Delhi.
 1932: Tata Airlines, first Indian airline formed.
 1953: All airlines nationalized and consolidated
under Air Corporation Act 1953..
 1986: Air Taxi Scheme – Private companies
allowed non-scheduled air transport.
 1994: Liberalization Policy – Air Corporation
Act 1953 repealed.
Airways Before Privatization
 Consumers were avoiding it.
 Employees were free to continue their “WHO CARES?” attitude.
 It was not competitive.
Airways After Privatization
 2007: Merging Air India and Indian Airlines .
 After merging a new company formed called the National Aviation Company
of Indian Limited (NACIL).
 In July 2008 was seeking US$ 540 million in
aid from the Indian government to cover
its losses.
Its Economical Impact
 Profitability is quite high.
 Currently the funds being used to revive the airlines
can be used in the development of other sectors.
 Technology upgradation.
Conclusion
 There is a need for strong and independent regulatory body.
 Privatization is essential for effective liberalization and therefore
competition.