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IA defends plea to scrap uneconomical routes
Thursday, 30 January 2003, 20:30 IST
NEW DELHI: It is all for business, says state-owned Indian Airlines (IA), which has sought government permission to scrap some 50 loss-making routes in the country or compensation for the huge losses.
"You can only judge a company by its bottom line," a senior IA official told IANS. "If we are accused of incurring huge losses, then it is only fair that we should tell the ministry why.
"After all, it is like any other business."
The IA's plea has put the ministry in a quandary.
The airline wants to scrap uneconomical routes between Kolkata and the northeast and between smaller cities in Madhya Pradesh, Gujarat, Tamil Nadu, Karnataka and Kerala.
In these routes, IA said, there were not enough ticket sales to cover the operating costs, let alone maintenance.
The airline is believed to have incurred total losses of 
2.45 billion in the past year, of which the northeast alone accounts for Rs 500 million.
There are no private operators in sectors in the northeast, where poor communication and transport facilities coupled with inaccessibility make air operations very unprofitable.
IA officials pointed out that fares in this region were kept low due to social factors and even if they were increased, the percentage hike was always much less than that in the rest of the country.
"But if only IA is expected to fly to all the financially bad sectors and the private airlines need only operate in routes that make money, then how can you expect us to improve our services or survive the high operational losses?" asked an airline official.
"Left to us, we will operate only on the economical routes. And that is what we have told the ministry."
The airline has told the ministry to respond urgently to their plea and compensate it for the losses incurred in keeping up social and political obligations and subsidized operations.
A civil aviation ministry official said this would be a tough decision to make in view of political considerations.
In the IA's red list are sectors such as Chennai-Kozhikode, Bhopal-Indore, Mumbai-Vadodara, Ahmedabad-Vadodara, Mumbai-Kochi, Kolkata-Ahmedabad, Kolkata-Silchar and Agartala-Guwahati.
If the unviable routes were scrapped, many smaller towns where IA is the sole operator would be left without air services.
In many instances, the airline has had to fly sectors under pressure from influential chief ministers or other politicians.
Source: IANS
2.45 billion in the past year, of which the northeast alone accounts for Rs 500 million.
There are no private operators in sectors in the northeast, where poor communication and transport facilities coupled with inaccessibility make air operations very unprofitable.
IA officials pointed out that fares in this region were kept low due to social factors and even if they were increased, the percentage hike was always much less than that in the rest of the country.
"But if only IA is expected to fly to all the financially bad sectors and the private airlines need only operate in routes that make money, then how can you expect us to improve our services or survive the high operational losses?" asked an airline official.
"Left to us, we will operate only on the economical routes. And that is what we have told the ministry."
The airline has told the ministry to respond urgently to their plea and compensate it for the losses incurred in keeping up social and political obligations and subsidized operations.
A civil aviation ministry official said this would be a tough decision to make in view of political considerations.
In the IA's red list are sectors such as Chennai-Kozhikode, Bhopal-Indore, Mumbai-Vadodara, Ahmedabad-Vadodara, Mumbai-Kochi, Kolkata-Ahmedabad, Kolkata-Silchar and Agartala-Guwahati.
If the unviable routes were scrapped, many smaller towns where IA is the sole operator would be left without air services.
In many instances, the airline has had to fly sectors under pressure from influential chief ministers or other politicians.
Source: IANS