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Trouble in air
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New Delhi, Sept. 9: Air India is struggling to fend off competition in the international sector as the government hands out a rash of authorisations to its local rivals in lucrative routes. Though the national carrier has the right to fly to anywhere it wants, both outside the country and within, its has failed to leverage its freedom.
At a time private players are planning to start more flights, the paucity of long-range aircraft has hamstrung Air India’s ability to make the most of its bilateral rights to fly overseas. Besides, cost-cutting measures, which result in the cancellation of international flights, have rendered the beleaguered airline capable of using only 30-35 per cent of its bilaterals.
According to analysts, while carriers such as Jet Airways have got permission for seven flights per week from Bangalore to Brussels, Chicago, San Francisco and Washington DC, Air India has to rely on code sharing and has no plans to start flights. Jet also flies seven days a week to Paris and Frankfurt from Mumbai; it also has a similar schedule for Munich from four airports — Delhi, Chennai, Bangalore and Mumbai.
Besides, the state-run airline is thinking of curtailing flights after a report, based on April-June provisional route analysis, indicated that just 16 of its 68 international sectors covered their costs.
According to a recent civil aviation ministry report, Air India has suffered losses in all destinations in North America, Europe and the UK other than New York and Chicago in the last fiscal. Total loss stood at Rs 1,491.25 crore in 2011-12.
“A flight to San Francisco is much more profitable than Newark but instead of having a flight to San Francisco we have a code share. This is the case with Air India on choosing destinations the world over. For some odd reasons, Air India is either kept away from profitable routes or the flights are cancelled or private airlines are given so many bilaterals that they flood the sector making it almost impossible for the national carrier to compete,” said former Air India director R.N. Pathak.
Recently, Air India Express — a low-cost subsidiary of the national carrier — decided to withdraw its twice-a-week service on the Chennai-Trichy-Abu Dhabi route under its winter schedule effective October 28. According to Air India officials, this route generated more than Rs 100 crore per annum. “We are facing a shortage of staff on this route and this is the main reason behind stopping the service,” a senior official said.
Air India had very high occupancy levels on most of the Gulf routes before private players arrived.
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