Panel to rationalise Air India's loss-making routes (Lead)

Syndicated from IANS | Published on Mon, May 28 2012 21:54 IST | 3 Views | Add comment
New Delhi, May 28

Civil Aviation Minister Ajit Singh Monday constituted a four-member panel to examine Air India's route profitability, even as the strike by pilots of the national carrier continued for the 21th day, taking its losses to more than Rs.300 crore (about $55 mn).

The decision came after the minister reviewed the status of flights on domestic and international routes which are non-profitable.

According to a ministry official, non-profitable routes are those in which operational costs are not recovered or operational costs are recovered but total costs are not.

The official said that the committee will analysis criteria for withdrawal of routes, and economics of scale of the sectors being operated.

Meanwhile, there was no headway in the strike, leading to continuing losses.

"Current losses are more than Rs.300 crore. The losses are on accounts of ticket cancellations, unused labour and bulk of Boeing-777 fleet being grounded," a senior Air India official told IANS.

"Bookings on our international flight have stabilised and we have placed maximum number of seats in the lowest price bracket... that has also helped bookings in the domestic sector as well in the current contingency plan," he said.

The airline had decided last week to reduce fares by placing a large chunk of seats under the lowest fare category to augment its share in the domestic and international sector.

The airline had the fourth-largest market share in April at 17.6 percent, preceded by SpiceJet at 17.7, Jet Airways at 21.4 percent and IndiGo at 23.8 percent.

Apart from the new fare scheme, the airline will shift to a truncated interim schedule for June 1, whereby it will drop seven international destinations, which include Hong Kong, Osaka, Seoul and Toronto from its regular routine. The airline will then operate only 38 services instead of the regular 45.

Currently, the carrier is operating through a contingency plan under which a bare minimum number of flights are maintained by clubbing operations to various destinations in Europe and the US.

Air India has maintained that it has enough executive pilots to operate long-haul destinations in the US and Europe.

The company's board also met in New Delhi and considered several proposals to normalise the airline's international operations that have been crippled by the 21-day ongoing pilots' strike.

Among the several proposals being mooted to restore the passenger carriers' includes wet leasing aircraft from other airlines. The proposal, according to officials, will include renting of aircraft with pilots and cabin crew.

"There is a proposal to wet lease at least five aircraft with pilots and crew. We require pilots and crews to maintain operations to key destinations in Europe, US and southeast Asian destinations like Hong Kong."

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