A Study on Analysis of Operating Efficiency of Air India and Indigo Airlines

Abstract

The current airline industry of India has passed through so many changes like the standardization of airports, emergence of low cost carriers, privatization of airline industry in India and increase in the affordability of airline service among Indians. The present study is an attempt to analyze the operating efficiency of two scheduled domestic airlines i.e. Air India and Indigo Airlines. The study is based on secondary data collected from the Profit and Loss A/c and Balance Sheet associated with schedules, annexure available in the published annual reports of airlines and Capitaline data base. The data have been collected for the past twelve years ranging from 2004-05 to 2015-16 and compiled into tables and analyzed with the help of Ratio Analysis, Mean, Standard Deviation, Coefficient of Variation and Compound Annual Growth Rate. It has been found in the present that the national carrier i.e. Air India could not earn profits during the entire study period. The result conducted on the expenses ratio and profitability ratio depicts that the operating efficiency as well as profitability of Air India has been poor during the study period. On the other hand, the financial performance of private carrier i.e. Indigo Airlines has been good as compared to Air India which is clearly depicted in the ratio analysis.

Sustainability of airlines in India with Covid-19: Challenges ahead and possible way-outs

“…Undoubtedly, low-frill operation has proved to be a successful business model in the industry (Alamdari and Fagan 2005 ). Budget airlines and small chartered airlines witnessed more efficient in the system (Dhanda and Sharma 2018 ; Jain and Natarajan 2015 ; Saranga and Nagpal 2016 ) and dominated the Indian airline market (Deeppa and Ganapathi 2018 ; Wang et al 2018 ). The LCC in India have managed to achieve significant operational efficiencies with the rigid cost structure, heavy taxes, high landing and parking charges, undesirable regulatory factors (Saranga and Nagpal 2016 ).…”