Indian Airlines

1 CAPACITY UTILIZATION IN INDIAN AIRLINES Danish A. Hashim* Sir rattan cane Tata Fellow nominate of Economic Growth Delhi. 110 007. INDIA. E-mail: danish_hashim@yahoo.com April 2003 Abstract The financial deed of the state -owned Indian Airlines has deteriorated since 1989- 90. The main reasons cited for the poor financial cognitive operation of Indian Airlines include: rising fuel prices, excess staff, service uneconomic routes and increasing expenses on insurance. However, low capacity recitation has seldom been cited as one of the main reasons for the poor performance. The present study thence makes an attempt to measure the extent of capacity utilization in Indian Airlines and its impact on the unit be of production. employ data from 1964-65 to 1999-00 and applying a translog variable cost function, the capacity utilization has been estimated with respect to two alternative measures of potential output: (i) where short-run modal(a) cost is minimum, and (ii) whe re short-run and long-run average cost curves argon tangent. The results reveal that the capacity utilization in Indian Airlines has been poor in general and overly declining over the last decade.

Therefore, the study suggests a need to alter the capacity utilization, which in turn would improve the financial performance of Indian Airlines by reducing its cost per unit of output. * The present study is a part of my kick the bucket as a Sir Ratan Tata Postdoctoral Fellow at the Institute of Economic Growth, Delhi, India. I am grateful to Prof. B. N. Goldar and Prof. Arup Mitra for their valuable comments and suggestions. I would also like to thank Dr. D. N. Nayak, M. S. University of Baroda, Dr. Vinish Kathuria, Madras School of Economics, and Mr. Pravakar Sahoo, IEG, for their helpful comments. An earlier displacement of this paper was presented at the Institute of Economic Growth, Delhi, on 27 December 2002. Comments from seminar participants were helpful in fine-tuning the paper. The usual disclaimer... If you want to suck up a full essay, order it on our website: Orderessay

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