IA Achieves Net Break-even On Only 11 Domestic Routes

New Delhi, May 22: | Updated: May 23 2003, 05:30am hrs
Indian Airlines is able to achieve a net break-even on barely 11 (15 per cent) of its total 70 domestic routes/services. The rest of the services/routes are into losses on a net basis, though 35 services manage to achieve a cash break-even.

But the picture is rosier when it comes to international sectors of the airline. Of the 42 services, 20 met the total cost of operations (net break even), 17 services met the operational costs and five services are loss-making. IAs passenger load factor has dipped from 65.3 per cent in 2000-01 to 60.5 per cent in 2001-02, as the number of passengers ferried have decreased from 5.99 million in 2000-01 to 5.53 million in 2001-02.

While the airlines overall load factor has decreased to 62.9 per cent in 2001-02, from 67.4 in the previous year.

IAs revenue tonne/km which also indicates the airlines utilisation is down from 777.34 million to 755.55 million during 2001-02.

During the year, IA introduced domestic operations on Mumbai-Jaipur, Mumbai-Pune, Ranchi-Kolkata, Ranchi-Lucknow, Silchar-Guwahati and Bagdogra-Guwahati. While the new international routes included Hyderabad-Dubai, Thiruvananthapuram-Sharjah, Jaipur-Dubai, Delhi-Dubai, Chennai-Dubai, Kochi-Doha, Kochi-Bahrain, Hyderabad-Bangkok, Kozhikode-Muscat and Kozhikode-Dubai.

Most of the domestic operations of IA are not meeting costs which include the wage bill, insurance and maintenance expenses among others. Incidental costs are more on short and hopping flights because charges on landing, route, navigation and parking get magnified as against operations between two points, a company official said.

IA is trying to cut losses and improve profitability, but is saddled with problems such as rising prices of aviation turbine fuel. It has worked out a strategy to pare costs and is undertaking rationalisation of aircraft capacity deployment, inventory control and fuel monitoring. It has, along with other private airliners Jet Airways and Air Sahara-- approached the civil aviation ministry seeking rationalisation of fuel, route, navigation and parking charges at airports.

Last year, it adopted a flexi-fare policy under which it announced discounted special fares if purchased in advance, called apex fares. Airlines are going all out to woo passengers by announcing cheaper fares, eyeing the additional revenues they can get from holiday and leisure travellers as the industry continues to be in doldrums. The industry expects domestic travel to pick up by month-end and further in June with the start of holiday season.