Sunday, June 26, 2011

Air India- the heat is on

Neelam Mathews
June 26, 2011

As Air India looks to starting flights to Sydney or Melbourne and increase its flights from five to dailies to Paris, the carrier’s image worldwide has taken a beating with only 20% of management salaries paid since April. (The rest is paid as performance-linked incentives (PLI).

Insiders say policies in the past three years have led to this dire situation with some political interests acting against the carrier’s interests.

“Twenty eight lucrative routes were withdrawn in the past year adversely impacting airline's revenues, and given to private carriers. Air India is good at starting routes that are new and then pulling out when they start making money,” an analyst tells Aerospace Diary.

Around 80% of the routes withdrawn were on the international sector with a load factor over 80%. Routes that were doing well and withdrawn included Amritsar-London-Toronto, Chennai-Colombo, Kolkata-London. Presently, Jet Airways flights to Toronto are running at high load frequencies.

Following the recent announcement of BMI extending its Almaty service to Amritsar for Heathrow, an official says Air India’s Amritsar-Birmingham flight was doing well. “What are the powers at play here?,” he adds.

There have been complaints mismanagement is taking its toll. “Lobsters are served on the Dubai flight. We have constantly informed management this is unnecessary as people do not ask for them and they are wasted. This is the most expensive dish costing Rs 1200 a plate. Why is nobody listening?,” moans an inflight crew member.

Air India’s entry into Star Alliance too, has been riddled by bullet marks. It is four years since it was invited by Star to join and merger issues with Indian Airlines and lack of political will has created a crisis situation where after paying around $200,000 for initial membership, the carrier has to face the embarrassment of being informed it now has a deadline.

Word has it that Jet Airways will soon after Air India’s entry, be asked to join the Star Alliance. In which case what happens to the lack-of-marketing, image-unaware and image-resistant national carrier? “Star lets its members work its own plans……..,” says a Star Alliance official. 

Airlines are known to add between 5-10% to their revenues after joining Star. 

The race may not as yet be over for Air India.

1 comment: