Air India parent, National Aviation Company of India Ltd (NACIL), announced the Board of Directors are scheduled to meet with the Ministry of Finance on 19-May-2010 to discuss the carrier’s turnaround plan (The Economic Times, 18-May-2010). The carrier is targeting a USD439 million reduction in costs p/a. The Board also informed that a 15% reduction in employee costs would result in cost savings USD110 million p/a. The carrier plans to increase revenue by USD285 million p/a and increase load factor above 80%. Load factors on the domestic and international networks are averaging 72% and 69%, respectively. NACIL also plans to increase operational hours of new Boeing and Airbus deliveries to 14 and ten hours per day, respectively.
Air India targets USD439 million in cost reduction and USD285 million increase in revenue
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Australia-India air travel market grows rapidly but SE Asian hubs hinder nonstop services
The Australia-India market has experienced rapid growth over the last three years, prompting Australia to lobby for more direct services. Visitor arrivals from India are up 50% since mid-2013, and total passenger traffic between the two countries is up approximately 30%.
Air India launched services to Melbourne and Sydney in 2013 but the Australia-India market is still dominated by Southeast Asian flag carriers. Singapore Airlines has been able to maintain a leading 41% share of the market. Malaysia Airlines also still carries more Australia-India passengers than Air India.
Attracting more nonstop flights from Air India, or the possible launch of nonstop flights to India by Australian carriers, will not be easy despite growing demand. Southeast Asia’s network airlines have a competitive advantage as they serve several gateways in both Australia and India. Southeast Asia’s growing medium/long haul LCCs have also started to compete in the Australia-India market and are well positioned to take a large share of the anticipated growth.