The Hindu : Kerala News : AI may not operate low-cost flights to Gulf

Online edition of India's National Newspaper
Monday, Apr 12, 2004

Kerala

Kerala

AI may not operate low-cost flights to Gulf

By Biju Govind

KOZHIKODE, APRIL 11 . Air-India is unlikely to go ahead with the proposal to operate low-cost flights to Gulf destinations from any of the three airports in the State.

According to sources, the proposal for budget flights is unlikely to materialise considering the huge revenue loss to the official aircraft carrier. "The proposal usually comes up for discussions at almost every board meeting. But a final decision is yet to be taken," according to a senior Air-India official who is on a tour to the State.

The sources said today that the revision in the fare could not be considered unless the market situation changed in the immediate future. However, the proposal was under the active consideration of the board, he said, adding that Air-India's chunk of the profit came from the flights operated in the Kerala-Gulf sector.

He pointed out that no international or domestic airline giving frills like drinks and five-star meals would be able to cut down the air tariff to woo the customers. "Normally, the no-frills airlines are cheaper by about 20 per cent, '' he said.

Recently, Air Arabia of Sharjah had sought the permission of the Ministry of Civil Aviation to operate flights from Sharjah to Kochi. The Chief Minister, A.K. Antony, had also requested the Prime Minister, Atal Bihari Vajpayee, to clear the proposal. The Air Arabia chairman, Sheikh Abdullah bin Mohammed Al Thani, had also sought Mr. Antony's intervention in this regard, the official said.

However, sources said that Air-India did not require the permission of the Ministry of Civil Aviation to operate low-cost flights to any destination. A decision could be taken by the board itself. No time-frame has been set to take a decision on the budget flights to be operated from the Gulf destinations to Kerala, the official said.

Aircraft companies had been operating low-cost flights in the international sector ever since it had become an accepted business norm worldwide. But past experience had shown that some of the companies that had started the budget flights had failed to mop up revenue as expected. Air-India would have to look into all these aspects before jumping into conclusions, he said.

He said that the Minister for Information and Non-Resident Keralite Affairs, M.M. Hassan, had been making a hue and cry about budget flights to the Gulf countries for the benefit of passengers from the State. Mr. Hassan also held several rounds of discussions with the Air India chairman and managing director, V. Thulasidas. Mr. Hassan had even threatened to launch an agitation if Air-India did not yield to the demands of the State, the official said.

But the fact remains that the success of the low-cost flight operations depends on several factors, including the cooperation of the other players involved. Handling charges at airports, landing, navigation and parking charges need to be considered in this context. The State Government, which had a major stake in the Cochin International Airport Limited at Nedumbassery, had given the green signal to offer concessions at the airport, he said.

He said that the recent call by some NRI groups to boycott Air-India had not made any effect on its operations in the Kerala-Gulf sector or the revenue of the aircraft. The sources said that the scrapping of sales tax on Aviation Turbine Fuel by the State Government had benefited Air-India. "In the peak season, the revenue increases at least by three to five per cent in the peak season in the Kerala sector, '' he said.

Fares in different itineraries had been reduced ranging from 18 to five per cent in all seasons.

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