New Delhi, July 7 :
Air India's row with Virgin Atlantic Airways, its latest code share ally, appears to be deepening. Air-India is wary about Virgin's six-flights-a-week offer to Delhi that is certain to hurt its bottomline.
Nor is India's flagship carrier enamoured by Virgin's plea that the number of flights allowed to the UK under a bilateral deal between the two countries should be increased and the extra flights handed over to it. Both sides of course are trying assiduously to project a front that everything is hunky dory.
'The three flights that Virgin plans to fly to Delhi will complement Air-India's thrice-a-week service so we have absolutely no complaints about them,' civil aviation ministry officials said.
The ministry, which has been brought into the picture with Air India lobbying it for help, wishes to remain neutral but at the same time refrain from taking any steps that could hurt Air India.
It has already made it clear to Virgin boss Richard Branson that it does not favour a fare war as this could mean lower yields for Air India. Virgin of course has argued that 'lower fares will mean more seat sales and the overall turnover would be higher.' Air India has found to its detriment in recent fare dogfights that this argument does not always hold true.
If Virgin starts flying three more flights that compete with Air India, then it means losses for that already loss-laden airline. Air India earns about Rs 40 crore from each flight to Britain. Competition from British Airways has already eaten into its profit margins. If Virgin now starts giving AI a run for its money, it would obviously be in deeper trouble.
In their discussions with Virgin Airways, Air India top brass have reminded the airline that it can only allow it to fly an extra three frequencies if A-I manages to reta-in its current load factors on the ten flights it now flies to London and manages to sell 65 per cent of the 30 seats it is allowed to sell on every Virgin flight over the next six months. This, they insist, is also part of the deal they signed last year along with another tricky clause which insists the overall arrangement should result in at least 70 per cent seat factor over a consecutive six months.
Virgin also wants A-ir India to pitch for more flights out of India to Britain and pass on the extra entitlements to its British code share partner. A-I is not pleased with such requests as it wants to keep them until it manages to either buy or lease extra a-ircraft which would allow it to exploit its rich store of rights to fly to various destinations.