Only 2 of 175 AI-IA routes recover costs

Tajsats catering may put Air India on cash-&-carry

Travel News
Travel News

Air India is able to recover costs only on two of the 175 routes operated by the erstwhile AIand Indian Airlines. These two routes are: Delhi-Tokyo and Tokyo-Delhi. 

In all the other 173 routes, the airline is either not able to recover fuel cost, cash cost or the total cost. Eight flights like Amritsar-Delhi-London, Delhi-Dubai and Amritsar-Delhi-Toronto are not even able to make enough money to pay for the fuel expense. On domestic sector, three metro flights (even Mumbai-Delhi and Delhi-Chennai of certain time slots) were found to be in the same state as per a report in ET by Saurabh Sinha.

These startling revelations came as the airline management did a six-month survey of all routes from April to September, 2011, to see how losses can be cut. Now the worried top brass has set up a panel to examine how the timings or frequencies of the national carrier's flights can be tweaked so that they can get better passenger loads and cut losses. The airline has a life-threatening debt-losses combine of over Rs 62,000 crore. 

"90% of the losses in these six months came from international routes. AI lost Rs 791 crore on routes in that time, of which only Rs 57 crore was due to domestic flights and the rest on foreign flights. The entire network planning needs a relook and urgently to cover the revenue-expenditure gap," said sources. 

Meanwhile, to add to the woes, India's largest flight caterer Tajsats on Monday night warned AI that the national carrier would be put on cash-and-carry from Tuesday over mounting dues. While it is common for airport and oil companies to issue such threats to airlines, it is the first time that even a company supplying food on aircraft had to resort to this time-tested practice of making people pay up.

"Tajsats claimed dues of Rs 45 crore, of which about Rs 15 crore could be in the credit period limit. We promised to pay Rs 7-8 crore by next week and a like amount next month. The risk of being put on cash-and-carry by the flight caterer has been averted for now," said a senior AI official. AI has an annual bill of Rs 180 crore for food supply to aircraft in India and Rs 250 crore abroad. Tajsats is the largest supplier to AI in India.

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