Grounding of Dreamliners knocks wind out of AIs sails

Written by Debabrata Das | New Delhi | Updated: Jan 19 2013, 07:52am hrs
The grounding of Air Indias Boeing 787 Dreamliner fleet has thrown a spanner in the national carriers turnaround plan. With no clarity on when the 787s will fly again, the airline may also struggle to complete the 787s sale and lease-back programme, which means it will remain saddled with a $695-million bridge loan taken to produce the first six planes.

The carrier will be forced to replace Dreamliner flights with the less fuel-efficient Boeing 777s and Boeing 747s, which will mean an escalation in its fuel bill over the previous three months. The airline will also be forced to delay the launch of new lucrative routes, such as Sydney and Melbourne.

There will be an impact on the fuel bill also, maybe to the tune of 25-30% (over what it was with the Dreamliners), said a senior Air India official on the operations side. The 777s and 747s are gas-guzzlers and that is why we had begun to replace them with the 787s.

A Boeing 787 consumes 20% less fuel than a similar aircraft. Air India had started to put in place the 787s on routes where Boeing 777s were flying, with replacement on the Delhi-Paris route happening only last week. The national carrier was able to turnaround previously unprofitable routes, such as Delhi-Frankfurt, mainly due to the fuel efficiency of the Dreamliners.

Air India has also been forced to fly the Boeing 747 in its fleet. The jumbo jet, which has four engines and consumes much more fuel than modern aircraft, has been slowly de-comissioned by many airlines around the world. Air India, which had five such planes, had put two on VVIP duty while it started reducing its use.

We have been forced to use the 747 because five of the 777s have been put up for sale, the official quoted above said. Out of the eight 777s we own, one is flown to New York, one to London and the third was flying to Paris while the rest were put up for sale.

The Boeing 787 was also key to Air Indias plan for expanding on new and profitable international routes. The national carrier planned to resume flights to Australia and Singapore using the new fleet. But that plan will also be put on hold.

The Dreamliners, in their short run of operations, had become quite popular and now we run the risk of losing some of the market share gained by flying these planes, the official added. We will have to delay the opening of some new routes to Australia and Singapore where we planned to deploy the Dreamliners.

Meanwhile, Air India would also have to impart refresher courses and re-train around 80 pilots who were trained to fly the 787. The pilots would need simulator training before they can fly the 777s again.

Air India officials, however, seem to be in disagreement with concerns emerging amongst officials in the operations arm while those in the finance division are positive about the turnaround plan going smoothly.

Im sure the Boeing will do what is needed and the 787 will fly again soon, said an Air India official in the finance division. This is just a small hiccup and will not cause a big problem to the turnaround plan but yes we will consider seeking compensation if the delay in flying these planes last for a long time.

Yes the 787 was important to the turnaround plan but we have other measures also including sale of real estate assets, rationalising salaries and increasing utilisation of our fleet, the person added.