The Hindu Business Line : Traffic hits a plateau in Gulf sector, says Air India chief

PASSENGER traffic in the Gulf sector is not growing any more and existing capacity is adequate to cater to real-time demand, says Mr V. Thulasidas, Chairman and Managing Director.

"We have been providing round the year capacity, and there are also others operating in this sector. But we have found that the traffic is not growing substantially. It has reached a kind of a plateau. So I think the existing capacity is adequate," Mr Thulasidas told Business Line here.

Asked how Air India proposed to respond to traffic stagnation in one of the carrier's most rewarding routes, he said he was confident that the vibrant nature of the Indian economy would always beget a booming travel market and assured business for the airliner.

"In fact, at the last IATA meeting at Singapore, India and China were described as the market of the future. So the strictly regional imbalances, as evidenced in the Gulf-bound traffic from here, should not create a big problem for Air India.

"But we must be able to bring down costs, enhance profitability and productivity, increase size and upgrade quality. These are the areas where we should seek to concentrate."

Mr Thulasidas sought to deny allegations that the international carrier is extending a step-motherly treatment to Kerala. "I don't understand how one gets an impression that the State is being neglected. Air India operates 18 flights from Thiruvananthapuram and 26 or so from Kochi. Now, if some one says look this is inadequate, and you ought to put more flights between Kerala and the Gulf, for instance, I can understand.

"But I don't think there's a demand for more flights. Yes, there will be a demand during Onam and other festival seasons. But then we also operate additional flights during those occasions. There could be other demands that the fares should be lower; so we have lowered fares effective from April 1, 2004.

"But there's still a demand for lower fares. That's why the budget liner Air India Express is being introduced. From this, one can see that we've been responding to the demands of the market. And Kerala is a market to which we've been responding proactively. Because, this is one of the main markets for Air India," Mr Thulasidas said.

According to him, a new demand from the travelling pertained to improving of schedules. "We're seized of the issue. We admit we've not been able to pay full justice to this demand because of the small size of our fleet. But with the Air India Express coming in, I think the scheduling issues would be sorted out to some extent.

"There's also this plan to bring the an aircraft engineering unit to Kerala. So there's no valid case of Air India neglecting Kerala. If anything, it can be seen that it's been more partial to it than could be expected."