Sometimes luck does matter. Air-India, which was working hard at its comeback bid, now faces the prospect of writing its balance sheet in red - thanks to an inauspicious start with the SARS virus in April, this year.

The estimates of the fiscal 2004 - in which the Rs 5,000-crore airliner was expecting a significant growth over last year's profit of Rs 100 crore -could go for a six as the SARS virus and the resultant pilots' stir are bound to corrode its high volume traffic to South East Asia. The cut-throat competition among all the South East Asians to draw tourists back to their region can further ground A-I's rehabilitation plans.

But analysts are worried whether the airline can meet its profit estimates for fiscal 2004. "The lack of new and modern aircraft can de-rail Air-India's future plans," says an aviation analyst. It's a sad reflection for an airline which till mid-80s had almost 50 per cent of the out-bound travel market. It has now crashed to below 20 per cent. It makes more money - a whopping Rs 240 crore from foreign airlines - by not utilising its bilateral rights!

Size Does Matter
At present, Air-India with a fleet size of 28 aircraft, is unable to meet demand during peak seasons. Even during the off-season it flies to West-bound destinations with near full capacity. But so do foreign airlines. The outbound traffic is growing in double digits and it's mainly the foreign airlines who are increasing their flights from India.

Air-India with its few and aging aircraft needs at least 10 new aircraft to meet its immediate demand. Its proposal to buy aircraft has been stuck at various levels in the government since the last three years which is taking its own time to decide on the proposal.

The Expansion Plan
Though Air-India has drawn up a plan to buy 17 planes worth Rs 13,000 crore, it's anybody's guess when the aircraft will eventually arrive. The long-drawn process and confusion over its disinvestment has already taken a huge toll on the airline's market share.

The babus in the aviation ministry have also decided to tag Indian Airlines aircraft purchase order with Air-India - delaying the entire expansion process further for both airlines.

While the IA Board has recommended purchase of 43 Airbus aircraft over a five-year period between 2003-08 at a cost of Rs 10,089 crore, A-I plans to acquire 17 long haul aircraft costing over Rs 13,000 crore including 10 on firm basis and the rest on option.

The Future is Dark
No one can predict Air-India's future. As long as Indian tax-payers are available for bailing out public sector units, Air-India need not to worry. But if it has to survive, it has to change. Buying new aircraft is a solution but servicing the debt to buy new aircraft is an equally uphill task for the airline's finance managers.

"The airline will require a massive bailout of at least Rs 1,300 crore from the government to acquire new aircraft and reduce its high cost debts. With disinvestment at the backburner... the government will have no other option but to dole out this sum in near future," says a former head of the airline.

The airline's future hinges on how the government encourages the airline to make its own route assessment plans and deploy aircraft accordingly. Old timers still recall the 'experience' of flying Air-India. This needs to be bought back. And yes, it needs to be free of babus.