The Hindu : Business : Air India to operate in new routes

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Wednesday, Oct 08, 2008
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Business

Air India to operate in new routes

Special Correspondent

Establishment of strategic business units will be completed by mid-2009

Reduces number of flights due to rise in ATF prices
AI, Indian Airlines merger will be over by June 2009

HYDERABAD: Air India (AI) is proposing to start operations in new routes in which it is not operating. It also plans to complete the process of establishing strategic business units (SBUs) for ground handling, MRO (maintenance, repair and overhaul), and training verticals by mid-2009.

Giving details to presspersons here on Tuesday, Chairman and Managing Director of Air India Raghu Menon said AI was exploring launching flights to the West Coast of the U.S., South Africa and Australia, as it was not operating in these routes. The company was the first airline from India to become part of the 21-member Star Alliance, which operated 18,100 flights a day to various destinations across the globe.

“If the fuel prices stabilise below $80 a barrel, the company will have a double-digit growth. Then we will look at some more new routes,” said Mr. Menon.

Due to the cost escalation of aviation turbine fuel (ATF), AI was reducing its capacity in terms of number of flights and also routes by 12-15 per cent.

Asked if the company was contemplating any reduction in ticket charges, he replied in the negative.

Occupancy ratio

The current occupancy ratio was 62-64 per cent against the ideal 74-75 per cent.

Air India, which was inducting A-319 into its fleet this month, received 38 out of the 111 aircraft it had ordered. Another eight aircraft would come by this year-end.

The complete order worth Rs. 44,000 crore was expected to be executed by 2012. “The slight delay is due to some technical problems and the recent strike in Boeing,” Mr. Menon pointed out.

The merger of AI and Indian Airlines would be over by June 2009. “I expect that 75 per cent of merger will be completed by March 2009 and the HR area will be left over. However, there will be no retrenchment. In the non-operational areas, we have stopped recruitment. At present, there are 32,000 employees.”

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