Global Economics

Air India Subsidiary Cancels Some International Routes


The financial crisis at Air India takes its toll on AI Express

The financial crunch at Air India is taking a toll on its subsidiary Air India Express which has now decided to pull out a few international flights and deploy them on domestic routes in the country.

Air India Express will pull out flights from routes in the Gulf and South-East Asia among which are Abu Dhabi, Bahrain, Singapore and Kuala Lumpur. The redeployment of these international flights will be in Delhi, Mumbai, Bangalore, Hyderabad and Chennai. This process will take place around September this year with Air India Express functioning as a low-cost service.

A senior Air India official confirmed that the company is already working on a low-cost model. "We noticed that travellers, especially corporates, have switched over to low-cost airlines from full service carriers on many domestic sectors," he added.

Tara Naidu, chief of commercial at Air India Express told ET: "Air India has drawn up a strategy where the merged entity Air India (the Indian Airlines-Air India combine) will emerge as a full-service carrier and Air India Express will be our low-cost service and both will continue to fly domestic and internationally."

Air India Express plans to have 25 aircrafts in its fleet—seven leased and 18 owned—by the end of the year. Today, it has 19 state-of-the-art Boeing 737-800 aircrafts. It began operations in 2005 and operates over 200 flights per week. Of these, 175 are across international destinations, 13 on the domestic routes and another 13 on behalf of Air India.

From a 2% market share during April-December 2007, Air India Express' market share jumped to 6% during February 2008-January 2009. The airline has a load factor of 75% and has ferried over 2.25 million passengers in the last fiscal against 1.7-million passengers in FY08.


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