No flights to 13 cities, yet AI makes money

New Delhi: National carrier Air India seems to be losing money in the cities it flies to and raking in the moolah in places where it doesn’t. On Thursday, aviation minister Praful Patel said that AI has offices in 13 cities where it does not fly to: Los Angeles, Amsterdam, Milan, Vienna, Copenhagen (closed this June), Zurich, Brussels, Moscow, Cairo, Tehran, Nairobi (went offline in January 2010), Sydney and Chittagong. But AI’s revenue from these places far outstrips the expenditure, hence leading to surplus.
He said the airline’s revenue in 2006-07, 2007-08 and 2008-9 was Rs 458 crore, Rs 398 crore and Rs 198 crore respectively. But the expense in these years was way below at Rs 76 crore, Rs 62 crore and Rs 17 crore respectively.
"These offices were opened for generating business and revenue well before code shares were even conceived. The primary purpose of setting up of these offices was to feed AI’s on line stations and to extend the market potential to increase. Airlines enter into such arrangements for the purpose of increasing their network, reach and revenue without actually deploying their own resources for operating to these markets," Patel said.
06/08/10 Times of India

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