Air India may ground 650 flights per week

New Delhi: Air India may ground a quarter of its weekly flights, bring all its services to West Asian labour hubs under its no-frills subsidiary and scrap a celebrated non-stop Mumbai-New York flight, as the cash-starved national carrier looks to tidy up its hangar ahead of an expected bailout package.
The steps could be part of a civil aviation ministry restructuring plan that will be taken up by a Group of Ministers (GoM) next Thursday to decide on Air India’s future course and its immediate demand for a Rs 5,000-crore equity infusion.
A senior official said that the carrier plans to scrap 650 flights that fly on what he described as non-essential routes. Such sectors bleed the company by Rs 2,000 crore per year, he said, requesting anonymity. The carrier is estimated to have accumulated losses of Rs 7,200 crore as on March, 2009, due to low yield, high fuel price and poor demand.
Among the laggards are the non-stop flights it launched to New York from Mumbai and New Delhi, which reportedly incurs a loss of Rs 750 crore per year, more than the amount the airline plans to save by cutting employees’ productivity-linked incentive. As part of the new plan, airline will scrap the Mumbai flight.
The national flag carrier’s route rationalisation plan includes shifting full-service flights to the airline’s low-cost subsidiary Air India Express on Gulf sectors, a top government official told ET. The capacity rationalisation on Gulf routes is expected to save the airline Rs 113 crore per year.
07/11/09 Nirbhay Kumar/Economic Times

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Categories: Air India - International Nov 2009, Air India Budget Nov 2009, Air India Domestic Nov 2009, Foreign Nov 2009, NACIL Nov 2009