New Delhi, June 3:
Air India may
still have to fly on international routes on which it is not making money at
the moment.
Air India
operates around 45 international flights a day, a majority of which do not make
money.
Sources said
that there are some flights like those to destinations in North America such as
Toronto, which do not even meet the cost of the aviation turbine fuel needed to
operate the service.
Timeframe for
turnaround
Official
sources told Business Line that the thinking in the Government is to
give Air India a set time-frame to turn around the loss-making international
routes that it operates.
Sources also
indicated that the airline could be given between six months to a year to make
an unprofitable route profitable.
“The Group of
Ministers (GoM) was clear that Air India's routes must be profitable. We will
implement the decision,” a senior Government official said.
The GoM, headed
by the Finance Minister, Mr Pranab Mukherjee, while providing funds to the tune
of Rs 30,000 crore to Air India, categorically stated that the airline routes
must be made profitable.
Committee set
up
A committee has
now been set up to look at the international routes on which Air India operates
and suggest ways of making those that are losing money profitable for the
airline.
Air India may
temporarily withdraw its services from these loss-making routes but at the
moment, there is no thinking on asking other Indian or international carriers
to operate on these international routes in place of Air India.
Induction of
New aircraft
Officials
indicated that the induction of new aircraft such as the Boeing 787 will make a
major difference in operating revenues on several routes.
This could be
on account of lighter weight of the aircraft which increases fuel efficiency by
20-30 per cent of the existing aircraft in the airline fleet.
The induction
of the Boeing 787 aircraft has been delayed by close to five years due to
production problems that the manufacturer is facing.
The delay in
induction is also affecting the profitability on international routes,
officials said.
Currently
several of the long haul routes are losing money as the wrong aircraft type are
being deployed on these routes.
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