Despite the civil aviation ministry conveying its displeasure, the National Aviation Company of India Ltd (NACIL), which runs Air India, has presented a strong case for starting a non-stop flight on the Delhi-Melbourne sector . NACIL has said the route would generate surplus cash of about Rs 59 crore over 18 months of its operation.

The airline management recently informed the company board, comprising Mahindra and Mahindra vice-chairman and MD, Anand Mahindra and Ambuja Realty chairman Harsh Neotia that the deployment of the aircraft on an alternative Mumbai-JFK (New York) would result into higher losses. Contesting the ministry?s stand, NACIL CMD Arvind Jadhav has said that commencing the Delhi-Melbourne operation would give the airline first mover advantage.

In a letter to the airline, the civil aviation ministry had asked it to reconsider its decision to operate the long-haul Delhi-Melbourne flight.

?In the first year of operation the airline would lose Rs 10 crore but would become profitable in the long run,? said an airline official.

The airline?s long-haul international flights contribute to majority of the majority of its losses, with its services to New York from Delhi and Mumbai alone adding Rs 400 crore annually to the losses.

The airline is estimated to have lost over Rs 5,200 crore last fiscal. In its preparation to operate the flight Air India has entered into an agreement with the state government of Victoria along with Tourist and transport Department which will provide a total incentive of Australian $77 million to the airline in the first year. The airline estimates to fly 128 passengers daily for the Melbourne-bound flight.

?There is no established flight on the Delhi-Melbourne route although there is significant traffic. There are a lot of ethnic Indians who live in Australia besides tourist and VFR (visiting friends and relatives). The flight to Melbourne can act as gateway to Australia and New Zealand,? Amadeus India MD Ankur Bhatia said. Estimates suggest that nearly 4.10 lakh Indians live in Australia with another about 1.10 lakh in neighbouring New Zealand. Many foreign carriers who take passengers from India provide onward connectivity to Melbourne via Singapore, Hong Kong and Bangkok.

The Australian flag carrier Qantas operates a flight between Mumbai and Sydney. The airline has a code-share agreement with Jet Airways.