Delhi-San Francisco service to give Air India Rs 900-mn revenue a month

Disinvestment-bound Air India is hoping to garner a revenue of over Rs 900 million a month from the lucrative New Delhi-San Francisco sector, in which it operates nine flights a week.

The national carrier added three flights on the route on March 25, taking the total number of non-stop services to nine a week.

The revenue from the sector was about Rs 600-650 million per month and it went up to Rs 710 million in December last year.

The service was launched in December 2015.

"We expect a net addition of Rs 25 crore (250 million) from this month onwards with the three new services, taking the total number of flights operating on this route to nine (a week)," an airline source said.

The source also hinted at augmenting services on other sought-after routes soon.

Air India's operating profit stood at Rs 2.98 billion in 2016-17 fiscal.

Last month, it took delivery of its 23rd and the last of the Boeing 777 plane which can be used in ultra-long haul routes, completing its 68 aircraft orders placed with the US plane-maker.

But the controversial sale of five aircraft to Etihad in 2014 has been a sore point for the airline, robbing it the edge it could have enjoyed in the international over other airlines, airline sources said.

"We could have dominated the US market had the sold-out aircraft remained with us. Today, our rivals are driving customers through their hubs abroad, to US destinations, whereas we could have offered them non-stop flights from here to several other US destinations," one of the sources said.

In its report tabled in Parliament in March last year, the Comptroller and Auditor General (CAG) had said that Air India had sold five Boeing planes to Etihad Airways at a significantly lower price than the indicative market price of the aircraft.

It said that Air India had incurred a book loss of Rs 6.71 billion on the sale of these planes and payment of Rs 3.24 billion towards interest on loans availed for procurement of these aircraft.

The aircraft were delivered to Etihad Airways between January and April 2014.

Now that the airline is on the block with the disinvestment process kicking in, the sources said they would continue to explore augmentation of services on the routes with high-seat factor, without being affected by the sell-out process.