Govt to save 25% on Haj subsidy via competitive bidding

The government will be able to save 25 per cent on Haj subsidy by designating carriers for flying pilgrims through global competitive bidding.

“We will be able to save around Rs 170 crore this year just by selecting carriers through competitive bidding for flying Haj pilgrims,” said a senior civil aviation ministry official, who did not want to be identified. Last year, the government had paid a subsidy of Rs 770 crore.

Saudi Arabian Airlines, Al-Wafer and Nasair won bids for operating Haj flights as they quoted the minimum fare. Air India tried, but was outbid. These three Saudi carriers will together operate 431 flights to bring in the pilgrims.

In the last 45 years, the government for the first time selected airlines through competitive bidding. Till last year, Air India used to be the designate carrier for Haj operations and operate on a cost basis.

“Air India also bid for the rights, but could not compete the cost quoted by these Saudi carriers. Even at much lower cost, these carriers are making profit because they get jet fuel at much lower costs,” said the official.

Jet fuel costs in India are much higher and make 40 per cent of the total operating cost.

During this season, 125,000 pilgrims will be traveling through the Haj Committee and 45,431 pilgrims through private tour operators.