The government is likely to tell the cashstrapped Air India to prune its order for 111 planes that would cost the exchequer about Rs 44,000 crore. This order was placed three years ago when the aviation industry in India was growing at nearly 30% and the economy booming.
But, now, in this slowdown, almost all airlines are struggling to remain afloat and AI is seeking a bailout from the government to survive. Nearly 45 of the ordered planes have already joined the Maharaja’s fleet.
Air India today requested its top management and senior officials to voluntarily forego their salary and productivity-linked incentives for July to help the cash-strapped and crisis-ridden airline.
Air India CMD Arvind Jadhav requested all executives in the level of general managers and above to voluntarily forego salaries and incentives for July as a gesture to ease the liquidity crunch faced by the airline, an Air India spokesperson told PTI.
State-run Air India said it will raise fuel surcharge on tickets from June 19, following similar moves by other carriers.
“We are increasing the fuel surcharge by Rs 400 effective tomorrow (Friday),” its spokesman said on Thursday, adding the higher fares were for both long and short haul routes on the domestic sector.
Earlier in the day, low-cost carrier SpiceJet Ltd raised its fuel surcharge on tickets by 400 rupees following a rise in jet fuel prices, a senior official said.
The Air India Chairman and Managing Director, Mr Arvind Jadhav, has asked the airline’s 31,500 employees to rise to the challenge that the current financial crisis poses.
“We should consider ourselves fortunate that we have been insulated from the adverse impact of the economic meltdown so far,” he said in a letter issued on Saturday.
Admitting that the airline has approached the Government, as the owner of the airline, for infusion of funds by way of equity and soft loans, Mr Jadhav hoped the Government would “extend a helping hand soon”.
However, he also cautioned that financial help from the Government could come with strings attached. “We also need to be conscious of the impact that disinvestment/privatisation can have on our lives, should this materialise,” the letter added.
National air-carrier Air India will launch a direct air service between Ahmedabad and Frankfurt from June 1.
The airline would also connect the city with London via Mumbai from June 1, a company release said here today.
The Ahmedabad-Frankfurt service would provide a convenient connection to New York and Chicago, the release said, adding “the new flight will be operated with a Boeing 747-400 aircraft.”
National carrier Air India is likely to receive an equity infusion plus soft loans amounting to around Rs 4,000-5,000 crore soon, a source said on Tuesday.
“The Government has, in principle, accepted that Air India requires equity infusion. A decision to this effect will be taken in due course. These are all matters which will be reflected in the coming budget irrespective of the (party/coalition) in Government,” the source said.
Striving to become a ‘green airline’, Air India today said it has made savings of over Rs 46 crore in six months till this February by implementing several measures to enhance fuel efficiency.
Quoting experts of the International Air Transport Association (IATA), who carried out its fuel efficiency audits, the national carrier said the total fuel savings projected for the year with “revised processes” were over 4.56 crore kilolitres of fuel.
After a delay of almost two years, Air India will get delivery of its first Boeing 787 Dreamliner aircraft by June next year, which would enable the national carrier to have more long-haul international flights.
“The first 787 will be delivered by June 2010,” Boeing International’s Vice-President Dinesh Keskar told PTI here, adding that the aircraft, called the Dreamliner, would enter into service in the first quarter of calendar 2010, with Japan’s All Nippon Airways being the launch customer.
The first six airplanes are now in different stages of production and flight tests at Boeing’s assembly plant at Everett in the United States. The 787 Dreamliner has orders for 895 airplanes from 58 airlines, with Air India ordering 27 of them and Jet Airways ten.
National carrier Air India Sunday launched its daily Delhi-Chicago flight via Frankfurt, the airline’s official
said.
The flight took off around 1.50 a.m. Sunday, the airline spokesperson Chandra Kumar said.
“We had 274 passengers on board, of which 24 were for the business class. The response is quite encouraging. We had about 80 percent occupancy for the inaugural flight,” Kumar said.
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Air India on Sunday resumed its Kolkata-London flight even as the British Airways suspended its operation from the city to London due to shortage of passengers.
The Air India Kolkata-London flight via Delhi left the N S C Bose International Airport here at around 10.30 am with 122 passengers, Air India sources said.
Air India, owned by the National Aviation Company of India Ltd (NACIL), had suspended its service on the Kolkata- London route in October 2008 but now it will operate flights between Kolkata and London via Delhi daily, they said.
National carrier Air India (AI) is at an advanced stage of negotiation with three public sector banks to raise Rs 5,000 crore, or nearly $1 billion, for funding its purchase of seven Boeing aircraft and spares.
According to an official familiar with the talks, AI is close to securing a loan from a consortium led by IDBI Bank, Punjab National Bank (PNB) and Canara Bank at lower than prevailing market rates for a term of 11 years. Being the lead arranger of the loan, IDBI Bank is trying to rope in more lenders to the syndicate, the official said. He added that the deal may be finalised by the month-end and the loan was likely to be disbursed next fiscal (FY10). When contacted, an AI spokesperson said in a text message that the deal was still at the negotiation stage and the company would, therefore, not be in a position to comment on it. Earlier, a similar deal between the carrier and a consortium of banks led by Barclays had to be aborted as the latter could not raise the total funding requirement.
Despite its huge losses, Air India has emerged as the number one carrier during October-December 2008, in terms of both passenger
carriage (market share) and aircraft movement of the 79 international carriers that operate to and from India, according to figures released by the government.
However, in overall share, Gulf carriers are dominating. Eight of the top 20 airlines (in terms of passenger carriage) were Gulf carriers in the same period. While, AI had a 24% market share of international traffic in October-December quarter, Emirates followed with 10.3% share, with third highest aircraft movement.
The Civil Aviation Joint Action Forum (CAJAF), has deferred its proposed agitation over Air India forming a joint venture in
ground-handling with SATS, following Government inviting its leaders for negotiations on March 20.
“We have postponed our proposed agitation from today as the Government has called for talks. We will be meeting the Civil Aviation Secretary, M Madhavan Nambiar, on March 20 and put across our view point,” Air Corporation Employees Union’s General Secretary, Vivek Rao, told PTI here on Wednesday.
The venue for the meeting has, however, not been decided as yet, Rao said, adding that, this is for the first time the Government has agreed to solicit views from the unions on this critical issue.
In a major initiative towards strengthening its global network, Air India will make its first-ever international hub operational at
Frankfurt this month-end, launching scissor operations to and from North America with a brand new fleet of Boeing aircraft.
At Frankfurt, a passenger flying from Delhi to Newark will be quickly transferred to the Mumbai-Newark flight and a person travelling to Chicago from Mumbai would have to change the aircraft on the Delhi-Chicago route.
It will take about 19 hours, including the changeover time at Frankfurt, for a passenger to reach the US cities from India.
Air India is set to unveil initiatives that would help it garner better passenger loads this summer. The airline will resume its Kolkata-London flight from the summer schedule beginning March 29.
On Monday, the carrier had said it would double capacity on the Amritsar-London-Toronto route, as well.
To reduce the transit time for those flying from Chennai, Bangalore and Hyderabad, the carrier is revising the departure time of its West-bound flights out of Mumbai from March 29. This would mean a passenger from Chennai headed for Chicago would spend lesser transit time in Mumbai. Same would be the case when flying back to India, said a spokesperson of NACIL, formed after the merger of Air India and Indian Airlines.
Air India will introduce a direct flight to Chicago from Hyderabad via Delhi/Frankfurt, beginning March 29, .
Announcing the summer schedule, the public sector carrier said it would also introduce Hyderabad-New York flight via Mumbai.
“Passengers will have the option to travel via Mumbai to Chicago and via Delhi to New York at the same fare,” an AI press release said.
National air-carrier Air India would offer freebies such as free-tickets, holiday packages, air-conditioners and microwaves to its
agents, who give the airline good sales using global reservation system, Galileo.
“Close on the heels of the recent major fare reduction and ‘Spouse Plus’ scheme for the passengers, Air India is now offering attractive incentives for its approved travel agents,” a company press release said today.
The state-owned carrier Air India has cut fares by up to 82% in 20 sectors on Tuesday, mostly on metro routes, following a dip in aviation turbine fuel (ATF) prices. ”The airline is cutting basic fares by 35-82% on domestic sectors,” said a spokesperson of National Aviation Corporation of India (Nacil), which controls Air India.
Jet Airways’ subsidiary, JetLite, too reduced basic fares on all its domestic flights with immediate effect. These fares will now be lower by up to 40%, Jet Airways said in a statement on Tuesday. A Mumbai-Delhi economy class basic fare will now be available for as low as Rs 750; the Mumbai-Chennai basic fare is at Rs 595; Ahmedabad-Goa is at Rs 245, while the Delhi-Hyderabad fare at Rs 999, without taxes.
On Sunday, Kingfisher Airlines chairman Vijay Mallya promised to slash fares from January 1. While he did not mention the exact percentage, experts believe it could be in the 10-15% range, which means fares could drop by Rs 500 to Rs 1,000. Jet Airways had already cut its basic fares by 15-40% with effect from Monday.
Travel agents in the country have had their way with airlines, at least in the domestic sector. National carrier Air India today agreed to pay a 3 per cent commission to travel agents, nearly two weeks after Jet Airways and Kingfisher agreed to do the same.
Like Jet and Kingfisher, AI too will pay the commission on the total fare including fuel surcharge and basic fare, instead of 5 per cent on the basic fare, which it used to pay earlier.
The three full-service carriers had stopped paying the agents commission since November 1.
This is a significant move since Air India accounts for the single largest chunk of agents’ revenues.
State-owned carrier Air India Head Raghu Menon was censured on Wednesday by the government for his proposal to offer leave without pay
to 15,000 employees.
Highly placed sources said Oil Minister Murli Deora took exception to Menon’s proposals during a meeting of the Federation of Indian Airlines and Civil Aviation Minister Praful Patel to resolve the crisis arising out of mounting fuel bill arrears.
Deora cut Menon short when he today again talked of the need to "rationalise" the workforce to trim losses arising out of negative growth and high fuel cost. "There should not be any layoffs. Why are you raising it now," sources quoted Deora as telling Menon.
The oil minister than widened his message on ‘no-job’ cuts to the other participants-Kingfisher Chairman Vijay Mallya and Jet Airways Executive Director Saroj Dutta- present at the meeting.
