National carrier Air India shifting most of its Gulf-bound services to low-cost Air India Express has seen the airline saving an estimated Rs 113 crore per annum.
The national carrier has been operating flights by the erstwhile Indian Airlines and Air India with twin- configuration of Business Class and Economy, while the low- cost subsidiary was operating only economy flights.
The three carriers separately were not only competing with other Indian and foreign airlines on lucrative Gulf routes like Dubai, Oman, Doha and Bahrain but also among themselves.
Therefore, the Civil Aviation Ministry felt the need to rationalise the Gulf routes and have more full-economy flights operated by Air India Express, while slashing those of the full-service carrier which were suffering major losses due to stiff competition.
Under the rationalisation plan, the number of flights operated by Air India Express to the Gulf were increased substantially as the total number of flights per week rose by 1,024 per week.
The net annualised impact of transfer of flights to the low-cost carrier was estimated at Rs 113 crore per annum, official figures showed.
With the Prime Minister's Office maintaining a close watch over the situation facing Air India, Civil Aviation Secretary M Madhavan Nambiar also wrote in this regard to PM's Principal Secretary T K A Nair last week.
