Haj subsidy has Air India fuming

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New Delhi, Sep 12: to the heavy volume of passengers going on the Haj, Air India started wet-leasing aircraft from other carriers. The Haj season comes during the peak season for air travel and aircraft for lease come at a premium. Wet-leasing involves the hiring of an aircraft along with its pilot and crew. Last year, Air India wet-leased three aircraft from low-cost carrier Spicejet to aid in Haj operations.

The standing committee on external affairs and the transport and tourism parliamentary standing committee had also recommended that the government progressively reduce and eventually eliminate the Haj subsidy altogether. The expenditure reforms commission in its tenth report has recommended that till the time the modalities of phasing out of the subsidy is decided, it should be frozen and the number of pilgrims availing it should also be frozen.

The Cabinet on Thursday kept the amount paid by the pilgrims for the round trip to Jeddah and Medina at Rs 12,000, as it has remained since 1994. In 1991, the amount paid by the pilgrims was Rs 10,000 as against Rs 14,056 per passenger paid to Air India by the government. This amount was then gradually raised to Rs 12,000 by 1994 against Rs 17,000 paid to the carrier. Last year, while 1,10,000 pilgrims availed the subsidy paying only Rs 12,000 each, the amount paid by the government to the carrier was Rs 47,454 per passenger.

According to sources, the total cost for Haj operations last year (for 1,10,000 pilgrims) was Rs 727 crore of which the subsidy requirement was Rs 595 crore.

This year, in order for the pilgrimage of 1,23,211 pilgrims, the total cost estimated by the government is Rs 847 crore, of which the subsidy requirement will be approximately Rs 700 crore.

Air India has been operating the Haj charter flights since 1954. Before that, pilgrims used to travel by ship with the ministry of shipping paying the subsidy.

The number of Haj pilgrims has risen significantly since 31,000 in 1995. In 2000, Air India carried 71,924 pilgrims to Jeddah and on Thursday the Cabinet approved an increase in the total Haj pilgrims that can avail the subsidy to 1,23,211 from 1,10,000 a year earlier.

According to sources, there are four main elements in calculating the cost of operating the Haj subsidy.