The Mangalore crash may not have come at a more inopportune time for National Civil Aviation Company of India or NACIL, the firm that runs national carrier Air India. Decades of mismanagement and under-investment had saddled the Maharaja with losses of over Rs 12,000-crore and a debt burden of around Rs 17,000-crore. With aggressive competition from private airlines chipping away at its once dominant market position, NACIL had been kept alive by government grants, even while the airline’s management had been given a stiff deadline to effect a turnaround in its ailing finances only last year.

State-owned Air India faces the challenge of saving its brand and reputation following the crash of its no-frills flight to the coastal city of Mangalore from Dubai. While the reason for the crash is yet to be established, travellers generally associate a disaster with the brand for a long time.

“With this brand equity of the airline would further go down,” aviation expert Jayesh Desai said. Faced with mounting losses, the airline had asked the government to help it stay afloat. The government has provided Rs 800 crore to the flag carrier in February against the airline’s demand of Rs 5,000 crore. NACIL was formed in August 2007 after the merger of Indian and Air India.

The tragic incident on Saturday morning is expected to damage the airline’s reputation even as it was getting busy to mend its badly battered financials and operations. There were signs of revival as NACIL started cutting its losses in the past few months on the back of an economic recovery and a concomitant growth in air traffic. “The incident would have an impact on the airline if the investigation shows that there was negligence on part of airline or pilot training was inadequate,” Centre for Asia Pacific Aviation (CAPA) India head Kapil Kaul said.

A senior aviation industry official said pilots needed special clearance for flying to and from the two south Indian cities of Calicut and Mangalore. External Affairs Minister S M Krishna told news agencies, “It was known and generally understood that the Mangalore airport and the runway is a very tricky runway and the skills of the pilot would be put to the maximum test while landing in Mangalore. Our worst fears have come true.”

A Bajaj Allianz executive said insurance companies may ask for a higher premium from the airline the next time it goes for fleet insurance. Asked if there were various instances of B737-800 aircraft crashing, Boeing India president Dinesh Keskar said, “There has certainly not been any other case in India.”

Keskar said that a Boeing team from Seattle, the headquarters of the American planemaker, would fly to India as soon as practically possible to help the investigators

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