Indian Airlines (IA) has been asked by the government not to fly to more destinations in the Gulf or to add flights till the committee on route rationalisation set up by the ministry finalises its report.
A sub committee of the Board is going into the question of route rationalisation to see which routes should be operated by Air India (AI) and IA respectively, and to work out a compromise formula between the two. "The intention is to maximise yields while avoiding duplication," said a source.
The committee was set up following disputes between the two carriers over some international routes.
IA flies on some Gulf routes and some other profitable Middle East routes which has been questioned by AI. Ministry sources tend to agree that the two carriers should not duplicate routes. IA uses smaller aircraft and directly connects various Indian cities to Gulf destinations. AI finds it difficult as a result to compete on these routes. IA sources said they could not fly to new destinations in the Middle East unless the ministry permitted it.
AI too has been asked by the civil aviation ministry and its board to abolish night flying on domestic routes.
Ministry sources said that this was resulting in further losses for the airline and was hence unnecessary.
Sources explained that plying on the domestic sector was unprofitable for AI as its fleet was not suited to these sectors and traffic was low. For example, a flight may go from Delhi to Madras to Singapore and the first sector loses money. Further, since the timings of the flights are unsuitable for domestic passengers, the revenue is lower since the tickets are priced lower.
The carrier suffered huge losses of over Rs 250 crore in 1997-98.
However, AI has been arguing that till it acquires more fleet, it would like to continue with these operations, according to ministry sources. A proposal to buy three additional A310s (in addition to the eight it already has) is at an advanced stage, while another plan to acquire three A300s (buy back deal) is expected to materialise later this year.
