Need for a national airline carrier (Flag carriers)

Note- National airlines normally are not that profitable worldwide due to overregulation,
overstaffing, excessive debt, poor management and political interference. Debt of Rs.
52,000, 7 unions, 140 planes fleet

Helps in building trade relationships. For eg., if India wants to build trade with an
African country, it can open routes directly through its national carrier. Otherwise, it
will have to rely on other private players to do so, who are profit minded.
Carriers can be autonomously used to boost tourism, and ascertain their
sovereignty.
Flag carriers can be thought of as an embassy on wings, with them carrying the countrys
culture, cuisine, commerce and goodwill around the world. Air New Zealand is a flying
example of Kiwi resourcefulness and ingenuity. A flag carrier that instils a sense of pride
when its tail is spotted on the runway of a far-off land; when it brings home the winning
team or when it flies out to evacuate citizens stranded in a conflict or disaster zone.
In an increasingly globalised world, smart governments recognise the importance
of having their flags fluttering on as many routes as possible. Its a message that
certainly hasnt been lost on Singapore, whose government owns the highly
respected Singapore Airlines, or Dubai, home of Emirates. In both cases, these small
states have made their airlines part of their national identity and growth strategy.
An airline to call your own is also useful to get your citizens around the world and
bring in visitors to invest and marvel at your achievements.
A fourth argument is perhaps more convincing in that airlines like other
infrastructure industries are a lot more than just passenger services and we should
look at airlines as being part of broader eco-system of related activities such as
airports, cargo services and technical avionics. Thus, the cost/profit issue is not
about airline services in isolation but their contribution to an overall wealth creating
set of activities i.e. aviation. In particular, there are spillovers between different
activities within the eco-system and costs that can be easily be externalized to the
firm but NOT to the ecosystem someone has to pick up the tab. So, if Ryanair
refuses to pay for buses to ferry passengers to their planes, the airport still needs
buses. What do they do? Increase the price of ground services to the national hub
carrier.
It flies to 41 international destinations, and 72 Indian ones, and has valuable so-
called bilaterals (agreements signed by two countries allowing commercial air
services between them). Air India hasnt used many of its bilaterals (and has given
some away for next to nothing), but as a state-owned airline, it retains the primary
right on such bilaterals. It has a massive ground handling and airport services
infrastructure. And it also has vast land holdings.