Ia To Charge Alliance Air Rs 90 Lakh Per Aircraft

Indian Airlines (IA) has decided to fix its monthly lease charges to Alliance Air at Rs 90 lakh per aircraft, bringing to an end months of negotiations between the two airlines.

Alliance Air, a wholly-owned subsidiary of IA, had taken on lease twelve Boeing 737s from its parent airline before kicking off its operations on April 15, 1996. Alliance Air has projected a net profit of Rs 14.2 crore for the first year of its operations after taking into consideration the lease charge fixed by IA. The parent airline had roped in a financial expert, S Krishnamurthy, a former Indian Audit and Accounts Service official, to work out a formula on the payment terms to be prescribed for Alliance Air. The subsidiary airline was revived last year in a bid to boost the feeder route business and almost the entire staff, including the pilots, was taken on contract in an apparent attempt to compete with private airlines. Both IA and Alliance Air officials have claimed that the move has paid off.

 

At present, Alliance Air operates on sectors where IA was operating its Boeings earlier, but the subsidiary airline plans to reroute its operations on its own in the next few months.

Alliance Air has already inducted 64 pilots from outside and another 26 are on deputation from Indian Airlines. The airline claims that it has been able to raise the utilisation of the Boeings from around 2,000 flying hours to nearly 3,000 hours. When IA was operating the Boeings, the utilisation had come down from 1,657 hours in 1994-95 to 1,629 hours in 1995-96. The shortfall was attributed to shortage of commanders.

IA has been able to increase the utilisation of its Airbus A-320 and A-300 from 2,150 hours in 1995-96 to 2,410 hours per aircraft in 1996-97. However, in 1995-96, the utilisation of the A-300 came down from the budgeted 2,392 hours to 2,182 hours . and for the A-320, the actual utilisation dropped from the budgeted 2,406 hours to 2,148 hours.