The Hindu Business Line : `Pvt airlines must share uneconomic routes'

THE Chairman and Managing Director of Indian Airlines (IA), Mr Sunil Arora, has reiterated his demand for a level playing field in the domestic civil aviation sector. He said that private airlines must share the burden of plying on uneconomic routes.

Mr Arora told the members of the Confederation of Indian Industry, Eastern Region (CII-ER), that in the North-eastern region alone, IA operates to 11 destinations while its nearest competitor Jet Airways operates to only four destinations. The other competitor Air Sahara operates to just two destinations in the North-East.

"When others are sharing the icing on the cake, then why not share the entire cake as well? They must share the burden of uneconomic routes," he said.

When asked to what extent the State-owned carrier was a beneficiary of captive traffic from the Government sector, Mr Arora said that it was not even in double digits.

"We do not want any captive traffic if there is equitable apportionment of uneconomic routes," he said.

The impact of the State sales tax - which averages about 25 per cent - is more on IA since the airline bears the brunt of flying on uneconomic routes more than competition.

Waiver of the State sales tax, "which at Rs 900-Rs 1,000 crore per annum is a pittance for the States", could provide a fillip to the domestic civil aviation sector.

Mr Arora said IA was seized of the need to augment connectivity from Kolkata not only to destinations in the North-East and Port Blair but to Delhi as well.

An additional Airbus A320 will soon be parked here to fulfil the "wish-list" for the region. IA was also looking at the possibility of operating to more international destinations ex-Kolkata.

The airline proposes to lease about half a dozen aircraft by winter this year. Mr Arora said that tenders pertaining to the lease of Airbus A319 as a replacement for IA's Boeing fleet had been received and would be opened soon.

Asked how IA would react when the "no frills" airlines launch their operations, Mr Arora said a counter strategy would be unveiled at the appropriate time.

In his welcome address, Mr Sanjay Budhia, immediate past chairman of CII (ER), urged IA to reduce the booking time with respect to apex fares since business travellers, who travel on short notice, are not able to meet the requirement.

He said the airline could consider the option of introducing on-the-spot discounts for flights that have to take off with empty seats.