The Hindu Business Line : Separate cargo arm likely after AI-Indian merger

According to Mr D. Kishore, Commercial Manager for Western India, one of the options being considered is creation of a separate subsidiary to handle the cargo operations of the merged entity. Other subsidiaries would also be created to handle operations such as catering, he added.

As far as Air India's fleet augmentation goes, he said the airline expects delivery of the first of the 68 new Boeing aircraft in March or April (Air India Express has already received its first aircraft) and these wide-bodied aircraft will be used to attract corporate travel business.

Mr Kishore said the airline was currently losing out to competitors in the corporate travel segment, but with the arrival of the new aircraft, it expected to attract significant business. "With the new aircraft, we will have one of the finest products," he said. "They will be state-of-the-art aircraft." "It is also a matter of our punctuality and schedule integrity," he added. "Hopefully you will see a total change of image."

Targeting GIT

The other travel segment Air India is targeting is the GIT (Group Inclusive Travel) segment. Air India has already spoken with a number of travel agencies and designed attractive packages to shore up the GIT business.

"Next year, we are targeting heavily the westbound GIT traffic to Europe and the UK and east bound to Bangkok, Singapore and Kuala Lumpur," Mr Kishore said.

The national carrier will also be starting a non-stop flight from Mumbai to New York (JFK) in the summer. Other destinations being considered by the management after the arrival of the new aircraft are San Francisco, Atlanta, Washington D.C. in the US and Geneva, Zurich and Rome in Europe.

Meanwhile, traditional routes such as the Mumbai-London route have seen a 30 to 35 per cent decrease in yields this year. According to Mr Kishore, the drop in yields is due to the dramatic increase in capacity.

"The five direct operators between London and Mumbai alone had nearly 58,000 seats available per week (when British Midlands was operating), which translates into 2.8 million seats per annum. If you take the indirect operators, the figure will easily cross 3.5 million seats only for Mumbai-London and back," he pointed out.

Mr Kishore suggests that Air India will have to rationalise its routes to counter the problem of excess capacity. The possible addition of flights to new destinations such as San Francisco and Atlanta would be part of such a rationalisation.

"We will have to get into new routes," Mr Kishore said. "We have to ramp up our operations to Mauritius, South Africa, Australia and South American countries."

More Stories on : Air Cargo | Mergers & Acquisitions | Airlines

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page