AI to deploy larger aircraft to cut losses on India-US route

To make the India-US routes profitable, national carrier Air India has decided to operate larger aircraft on these routes.

At present, the airline operates non-stop flights to New York from New Delhi and Mumbai daily, and also flies to Chicago. It makes losses of Rs 250 crore annually on these routes. The airline had also started flights to Washington and Los Angeles, but stopped operating on these routes, as they proved to be loss-making.

“We have tried various other ways in terms of hiring contract staff and offices at international destinations to make the India-US routes profitable. We have now decided to operate Boeing 777-300 ER (Extended Range) aircraft, which will give us 100 more seats a flight and increase our operating revenue,” said a senior Air India official, who did not want to be identified. We have applied for the necessary approvals for the same, the official added.

The national carrier operates on these routes with Boeing 777-200LR (Long Range) aircraft, which gives it a total of 238 seats — 195 seats in economy class, 35 in business and eight in first class. With 300 ER, the airline will get 342 seats — 303 in the economy class, 35 in business and four in first class.

The airline has a share of over 18 per cent in the domestic market, and carries over 33 per cent of the international passengers from India. But the airline is losing its market in the international sector to private Indian airlines.

The national carrier has also resorted to ways like closing its hub in Frankfurt and routing all its operations through Dublin, which is 40 per cent cheaper than Frankfurt. It also provides a hassle-free passage to US-bound passengers. The airline has also decided not to keep any hub internationally, and hub and spoke its operations through its new hub at the Delhi airport.

The National Aviation Company of India (Nacil), which runs Air India, has brought down its operating losses in 2009-10 by 39 per cent to Rs 3,472 crore from Rs 5,672 crore in 2008-09. The net losses contracted by 23 per cent from Rs 7,189 crore in 2008-09 to Rs 5,551 crore in 2009-10. The airline also carried more passengers in financial year 2009-10, improving its passenger load factor to 64.8 per cent.

The airline has also shown improved performance in the first half of this financial year. This helped it increase yields by 13 per cent and the passenger load factor by 67.1 per cent. Cargo revenues were also up by Rs 140 crore.