Air India loses $25cr

DHAKA: Profitability or just breaking even may be like chasing a mirage for the almost bankrupt Air India. The airline operates 42 international routes using widebody (twin aisle) aircraft.
 
A government committee set up to examine all its routes and then suggest ways of turning around their fortunes has found that these routes lost over 25 crore USD in 2011-12. And just 13 of them contributed to 75 per cent of the losses according to Air India’s statistics which disclosed in different Indian media. The top seven loss-making routes are AI`s most prestigious flights to North America and Europe.
 
Now, this preliminary report is being sent to the airline to see how these routes and the entire network could be tweaked by either changing flight timings; changing fares or putting different aircraft on those routes. "All the routes will be rationalized and an attempt be made to at least make them break even. The least loss-making routes will be started first once AI has pilots to fully utilize the widebody fleet," an Indian media quotes a senior official.

A six-month long survey of all routes from April to September, 2011, showed AI lost 13.88 crore USD and almost 90 per cent of the losses came from international flights. Even if AI somehow finds the answer to this problem, another big issue is: How to position pilots - 400 of who are on strike since May 7 - to fly the aircraft at least expense? AI operates about 75 per cent of its flights from the new hub at Delhi terminal 3 since November 2010. But historically Mumbai has been the hub and 75 per cent of the crew, pilots and cabin crew are stationed there.

As a result, they have to be flown to Delhi as passengers in large number to operate flights from here and then sent back. This April and May, AI used 209 and 309 seats (mostly business class), respectively, for transporting crew between the two metros. The crew has to be put up in five star hotels here, leading to huge expenses for the cash-strapped Maharaja. "AI spent 89.5lac USD on hotel expenses in Delhi last fiscal, while its overall hotel bill (both India and abroad) was 2.47 crore USD for erstwhile AI pilots and cabin crew. This is a really worrisome as it`s a luxury it simply can`t afford," said an official.
 
"We have decided that the pilots we hire now would be positioned in Delhi. While we hope that the striking pilots return to work, the wait for them to do so can`t be endless. AI got 165 applications for pilot posts in the very first week that we placed an ad for hiring," the official told the Indian media.

BDST: 2105 HRS, JUN 23, 2012
IH/MMK