Airlines cut down on routes to curtail losses

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Mumbai, Jul 4 : Having lost the battle against spiralling aviation turbine fuel (ATF) costs, airlines like the national carrier Air India, private carriers Jet Airways and Kingfisher, amongst others, have cancelled some of their routes to tide over the dip in traffic during the lean season. Most of the airline officials whom FE talked to, said that this is a temporary phase to mitigate the losses occurring due to poor load factors.

Says Jitendra Bharghav, director (PR), Air India, “We have cut down certain flights across the country due to the lean season. These routes were not economically viable and hence have been shut down temporarily. The ATF prices are also sky-rocketing and hence, we have cut down on non-profitable routes.” He said that he cannot give the number of flights that have been cancelled.

However, Kingifisher-Deccan combine has also decreased their flight frequencies from 585 to 464 due to the lean season. "We have rationalised our routes by merging Deccan with Kingfisher,” said an official from Kingfisher. A Jet official adds that even they have clubbed flights mostly in the off-peak season. Many of its flights on the Delhi-Mumbai, Hyderabad-Mumbai and Delhi-Kolkata routes, amongst others, have been called off temporarily. However, Jet has cancelled about 10% of its 330 daily flights from June 1 to September 15. Other low cost airlines like SpiceJet and Indigo have also rationalised routes.

However, an analyst from a Mumbai-based broking firm says, “Increasing fuel costs and falling passenger loads are now going to severely affect the bottomline of airline firms. The airlines have taken such measures to cut down their losses. However, the airlines sector is expected to report losses over Rs 6,000 crore for the 2008-09 fiscal.”

It may be noted that Mumbai used to handle about 730 to 740 flights daily some time back and now the figure has dropped to 640 to 650. Delhi has also seen a decline of 20 to 30 flights from earlier daily figure of 730. Bangalore has witnessed the sharpest decline with a daily movement of about 280 to 290 now, while earlier it witnessed 350 arrivals and departures," informs an official from the Airports Authority of India (AAI).