Lok Sabha Question No. 1034 (UNSTARRED), answered on 2017-12-21
Subject: Loss incurred by Air India on International Routes
Ministry: CIVIL AVIATION
Asked by: RAMESH POKHRIYAL NISHANK

GOVERNMENT OF INDIA MINISTRY OF CIVIL AVIATION LOK SABHA UNSTARRED QUESTION NO. 1034 (To be answered on the December 2017) 21st

Loss incurred by Air India on International Routes

## 1034. DR RAMESH POKHRIYAL"NISHANK"

## Will the Minister of CIVIL AVIATION

be pleased to state:-

- (2) the details of the foreign sectors/ flight routes in which the Air India is facing operational losses;
2. whether these routes are likely to be discontinued; if sO, the details thereof;
3. (b) the time since when the above losses are being suffered;
4. (d) whether proper marketing and research was done to launching of operation on the routes causing losses, if s0, the details thereof; prior
- 0) the specific steps being taken to tackle huge challenges regarding shortage of manpower in aviation sector?
6. (e) the steps taken to reduce the losses of the Air India during the last three years; and

## ANSWER

Minister of State in the Ministry of CIVIL AVIATION

(Shri Jayant Sinha)

- (a) (b): During the April-October, 2017 there are 3 flights which are not meeting variable costs which are as follows:
1. AI-965/966 Mumbai-Hyderabad-Jeddah and vice versa.
3. AI-227/228 Kolkata-Yangon and vice versa:
- (c): Air India (AI) continually monitors the carriage / load factors financial performance of services on its network and makes efforts to improve their performance: Whenever any services give rise to cash losses, AI analyses the reasons for the losses and based on the strategic importance of such services to its network arrives at a decision whether to continue or withdraw such services. While determining the desirability or otherwise of discontinuing operations of making services Air India also takes into account the revenue contributions made by the subject services to its other services by way 0f feeder traffic: As such norprofitability 0f any one flight is taken in isolation as the sole criteria of its financial performance: loss -
- (d):AI conducts market research and studies the market developments potential an objective to introduce new routes increase or decrease frequency on
- existing routes /modifying the existing schedule/changing the equipment on a particular route etc:
- (e): As a part of the Turnaround strategy for AL, the company with the overall support of the Government, has initiated 4 number of steps in order to cut costs and losses. These steps inter-alia include the following;
2. Joining of Star Ailiance:
1. Setting up a Route Rationalization Committee to ensure revenue maximization by continuously looking at load factors, revenue yields and competitor fare structure and responding immediately to the same:
3. Induction of brand new aircraft on several domestic international routes to increase passenger appeal
5. Leveraging the assets 0f the Company to increase MRO revenue and revenue from Company's real estate properties:
4. Phasing out grounding of old fleet:
6. Introduction of PSS (Passenger Services System) to have a single code and SAP ERP based Solutions:
8. Operationalization of Subsidiary Companies such as AIATSL & AIESL and transfer of manpower and equipment and treating them as independent Profit Centers.
7. Establishment of Integrated Operations Control Centre and Hub Control Centre in Delhi:
9. Induction of the B-787 aircraft on Medium Capacity/Long Haul Routes:
11. Freeze on Privilege/Sick Leave Encashment:
- 10 Ban on staff overtimelholiday pay, except when operationally required
12. Encouraging of same return duty travel to avoid unnecessary hotel expenses. day
- (f): In order to meet manpower requirements in merged Air India for operational categories like pilots, Cabin Crew, Flight Despatcher , Security Agent etc;, AI has been carrying out recruitment in operational ` categories from time to time as per requirement: Other Private Airlines/ Airport Operators have their own strategy to meet their manpower requirement;