Govt backs AI: Canít make money, wonít let others try
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Months after the government decided to end Air India's monopoly on select international routes and threw them open to private Indian carriers, the state-owned airline is hoping to regain this privilege through the back door and get the first choice to fly these routes.
A committee formed by Civil Aviation Minister Ajit Singh in May to study the route dynamics of Air India has supported Air India's contention that private Indian carriers should not be allowed to fly international routes on which it is incurring losses. The committee, headed by a joint secretary in the ministry, submitted its report in end-July.
The panel report did not give reasons for supporting Air India's stance.
Air India has blamed the delay in the induction of the Boeing 787 Dreamliner aircraft in its fleet as one of the reasons for its losses in the international sector. Air India has apparently convinced the committee that the induction of 787s and other measures will improve its numbers. It has also deferred a decision on stopping flying on loss-making routes until the 787s are inducted.
Private Indian carriers have for long sought to operate direct flights on lucrative international routes such as Delhi-New York, Mumbai-New York and Delhi-Toronto, among others. But their requests were on hold until February this year as Air India had the right of first refusal. Private carriers could be allowed to fly these routes only if Air India refused to do so.
The committee's report, accessed by The Indian Express, shows that 13 long-haul international routes account for about 80 per cent of the cash losses suffered by AI on long-haul routes. During 2011-12, it was found that the state-owned carrier was not meeting even the cost of Aviation Turbine Fuel on three routes. The cost of ATF was being met on 58 routes but not the total cost of the flight. Only two flights paid for their total costs on a daily basis.
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