Air India to shift Mumbai hub to Delhi’s T3, cut costs by a third

New Delhi: Air India will shift its international hub to Delhi airport’s swanky new terminal 3 (T3) from Mumbai, under a deal that will help the debt-ridden national carrier cut costs by almost a third.
The airline signed a deal with Delhi International Airport (DIAL), a consortium that operates New Delhi’s Indira Gandhi International Airport, late last month to designate T3 as its hub. “This partnership will redefine Air India, provided it uses T3 intelligently,” said a senior government official, who asked not to be named.
Air India will bring passengers from all over the country to Delhi to fly them to overseas destinations. While the airline will get discounts on airport charges depending on the volume of passengers, DIAL will benefit from its association with the carrier that operates the largest number of international flights into and out of the country. “Making T3 our hub is a business strategy on the part of both partners,” said a senior Air India official. He did not disclose the discount, but hinted it could be as high as 30%. Air India expects the partnership to help it increase revenues by 9-12% in a year, he said.
Air India is yet to release its audited results for the fiscal 2009-10, but it is expected to post a loss of about Rs 5,400 crore on revenues of around Rs 15,000 crore. It has accumulated losses of over Rs 8,000 crore as of December 2009.
23/08/10 Anindya Upadhyay/Economic Times

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Categories: airports aug 2010, NACIL Aug 2010