Loss-laden Air India plans to develop Delhi as an additional network hub as its main centre of operation Mumbai has become too congested.
The move will help the carrier provide direct connectivity to international customers on its domestic network. The airline operates international flights to London, Frankfurt, New York, Tokyo and Singapore among others.
In a major operational overhaul, the carrier has decided to take a re-look at its international hub in Frankfurt, company CMD Arvind Jadhav is believed to have informed the civil aviation minister Praful Patel in a review meeting of airline in the capital on Tuesday.
The airline has said Frankfurt airport is very expensive and indicated that it would, for the time being, focus on point-to-point traffic. In a presentation to the Union minister Mr Jadhav said that the airline has achieved a higher load factor in the past few months. Air India also said that it will defer the delivery of three B777-300 ER (extended range) as part of fleet rationalisation plan. While the airline chief talked about cost cutting and revenue enhancement measures, the minister asked the company to improve its fleet utilisation.
“The minister has asked for a detailed report in the next 10 days on how it plans to improve capacity utilisation,” a person familiar with the development said. Mr Patel wanted to know as to why the airline’s average fleet utilisation was 8.5 hours while the private carriers managed to fly their aircraft for 12 hours a day. The aviation minister also sought to know the airline’s plan to clear off dues. The Air India top boss said it owed Rs 2,636 crore to oil companies, and its vendors among others. He, however, added that the company would clear the dues shortly. The government recently cleared a proposal to give Rs 800 crore as financial help to the national carrier.
Mr Jadhav said that the airline’s load factor had recently gone up and revenue improved.
“Passenger numbers went up because airline sold tickets at very low rate. The company sold 70% tickets at lower rate,” an airline official said on condition of anonymity. The airline is expected to lose nearly Rs 5,000 crore in the current financial year. It lost a similar amount in 2008-09.
Meanwhile, the Air India board is expected to meet in the next week to consider extension to its consultant Accenture.
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