Air India Regional to begin flights from Mumbai

by Vinay Bhaskara

An Air India Bombardier CRJ-700 - Image Credit: Nisarg Vyas

According to a report from the Hindu Business Line, Air India subsidiary Alliance Air (Air India Regional) has announced an expansion of its services from Mumbai, with new flights to Allahabad, Agra, and Gwalior.

According to the article, an Air India spokesperson said, “Alliance Air will be introducing new flights and routes on its network from September 9 from Mumbai to Allahabad, Agra and Gwalior.”

Mumbai - Allahabad will operate four times per week on Monday, Tuesday, Thursday, and Friday. Mumbai-Gwalior and Mumbai-Agra will both operate twice per week; Mumbai-Gwalior on Mondays and Thursdays, Mumbai-Agra on Tuesdays and Fridays.

Inaugural fares for Mumbai-Allahabad are set as Rs 3,979 one way and Rs 8,326 return while Mumbai-Gwalior is set as Rs 2,982 one way and Rs 5,874 return fare. Mumbai-Agra intial fares are Rs 3,979 one way and Rs 8,326 return.

As of August 2013, Air India Regional serves 23 Indian destinations with a fleet of 11 aircraft (4x Bombardier CRJ-700s, and 7x ATR 42-300 turboprops). It operates 233 flights per week, with the largest hub at Delhi seeing 53 weekly departures to eight destinations. Air India Regional does not currently serve Mumbai.

However, Mumbai is the second largest operating base for the Air India Group of airlines (including mainline Air India, Air India Regional, and low cost wing Air India Express), with 464 weekly departures in August 2013 (443 mainline Air India, 21 Air India Express). 

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MAP: 8 Air India flights cannot even cover their cost of fuel

According to a report from the Press Trust of India (PTI), Indian civil aviation minister Vyalar Ravi revealed before the Rajya Sabha today that Air India's estimated loss for FY 2010-2011 was Rs. 6,994 Crore, down sharply from the Rs. 5552.55 Crore loss posted in FY 2009-2010.

Ravi also said that, "Based on April-September, 2011 route wise profitability, two routes out of 175 services meet total cost viz Kolkata-Yangon (vice versa) and Kolkata-Kathmandu (and vice versa)."

He further related that, "Based on April-September, 2011 out of 175 services [by Air India], 8 services (are) not meeting fuel cost, 109 services(are) meeting fuel cost but not meeting cash cost, 56 services (are) meeting cash cost but not meeting total cost and two services meeting total cost,"

***Note the traditionally accepted difference between cash cost and total cost for airlines is that total costs include aircraft financing costs and aircraft lease payments, which are not included in cash costs.

An earlier report in the Times of India had confirmed those figures for the routes and also contained the following caveat: "90% of the losses in these six months [April-September] came from international routes. AI lost Rs 791 crore on routes in that time, of which only Rs 57 crore was due to domestic flights and the rest on foreign flights. The entire network planning needs a relook and urgently to cover the revenue-expenditure gap."

That report also listed Delhi-Tokyo-Delhi as the only profitable flight in Air India's network, a route not mentioned by Vyalar at the Rajya Sabha.

8 Air India flights not making fuel cost

Bangalore Aviation has obtained the following list of the 8 Air India flights that currently do not generate enough revenue to even cover their fuel costs. One of these routes was already revealed in our post about Air India's London Heathrow slots: Amritsar-Delhi-London Heathrow.

• Amritsar-Delhi-London Heathrow
• Amritsar-Delhi-Toronto,
• Delhi-Dubai (AI 947)
• Ahmedabad-Mumbai (AI653)
• Delhi-Chennai (AIC 437)
• Chennai-Delhi (AIC 438)
• Delhi-Gwalior-Mumbai-Gwalior-Delhi (AI 421/422)
• Mumbai-Delhi (2x: AI 623 and AI 624),
• Mumbai-Ahmedabad (AI 643)
• Delhi-Mumbai (AI688)
• Ahmedabad-Mumbai (AI 614)

In all, 15 of Air India's flights don't make their fuel costs: the map below shows these routes in red, as well as Air India's profitable flights in green.



*Click map for larger view


Maps generated by the Great Circle Mapper : copyright © Karl L. Swartz.

As the map shows, Air India's Delhi operation clearly faces a lot of trouble. Back in 2009, the carrier had shifted towards an intercontinental hub at Delhi's T3. Yet Air India is today unable to even cover its fuel costs on 7 different sectors from Delhi! Despite having a monopoly on nonstop flights from India to Toronto, Air India appears to be bumbling in its attempt to serve this large market of Indian nationals. It's time that Air India takes a good hard look at just how viable its international flights from New Delhi are, and whether it really makes sense for Air India to be operating widebody aircraft on domestic "tag" sectors for international routes (i.e. the Amritsar-Delhi segment of Amritsar-Delhi-Toronto).

At any other airline, routes whose revenues did not cover their fuel cost would have been dropped almost automatically; but at Air India; these routes will continue to be operated into the foreseeable future.

In the coming days, we will be analyzing Air India's financial results for FY 10-11 (and hopefully their annual report with its management commentary as well).

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