Air India`s low-cost West Asia plan nosedives

National carrier Air India's strategy to cut full-service flights and replace them with low-cost services by Air India Express on its West Asian routes has backfired.
The passenger load factor (PLF) of the flag carrier’s low-cost subsidiary for West Asia has fallen a steep 11 percentage points over the last six months as a result of competition from new low-cost entrants and fare wars by incumbents.
According to Ministry of Civil Aviation’s annual report Air India (AI) has cut the number of weekly flights to Kuwait, Dubai, Abu Dhabi and Muscat 27 per cent from 85 last summer to 62 in the winter schedule. Weekly flights to Dubai, one of AI’s hottest routes, were nearly halved from 36 to 19 during the year.
On the other hand, Air India Express increased its weekly flights to West Asia 42 per cent from 75 to 107 in the same time frame. But the PLF has dropped from 76 to 65 per cent, according to an executive from National Aviation Company of India Ltd (the company that controls state-owned Air India and Indian Airlines). The PLF on the Dubai-India route fell from 83 to 78 per cent in the same period. The average PLF on the West Asian route across carriers is over 80 per cent.
14/04/08 Anirban Chowdhury/Business Standard

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Categories: Air india Budget Apr 2008, Foreign Apr 2008, NACIL Apr 2008