The Indian civil aviation ministry study into the lack of profitability for Air India on international and domestic routes found that the lack of freedom in deciding aircraft deployment; foreign carriers getting multiple points of access within India and carrying away traffic; and Indian private airlines concentrating on Delhi International Airport as an international hub were to blame for the airline’s poor performance.
As soon as Air India lost its route monopoly when the airspace was liberalized, the study found that Air India is making significant operational losses due to a “huge” mismatch between the aircraft it flies and the sectors it operates in. In other words, Air India has been using larger aircraft on low-traffic routes with low load factors.
Therefore the study declares that the airline needs to cut out all loss-making routes. The ministry’s study found that since AI is the national carrier, its social obligations constrict its ability to stop services on many loss-making routes. However the study also found that routes operated with A320 family aircraft were also losing money. Eight such flights did not even meet fuel costs, 68 others just met fuel costs but not the overall cash cost and 46 others were meeting cash costs but not total costs.
Government Air India study findings released
