Air India head of corporate communications Kamaljeet Rattan stated the carrier will operate around a dozen fewer services per day until mid-Jun-2011 as the carrier is unable to make full jet fuel payments (Dow Jones/TNN/Economic Times/Live Mint/Marketwatch, 30-May-2011). The carrier is reducing capacity by between 10% and 20% through a mix of cancellations, mergers and capacity reductions. "This schedule has been put in place since Friday and will be implemented until June 15," he said. The further schedule will be drawn depending on how the situation unfolds over coming days. Air India had to cancel several domestic and international flights on 27-May-2011 after oil firms refused to provide fuel. Since Dec-2010, Indian Oil Corp Ltd, Hindustan Petroleum Corp Ltd and Bharat Petroleum Corp Ltd have put the carrier on a cash-and-carry basis to acquire fuel, due to concerns over the carrier's ability to fund the purchase of jet fuel. Mr Rattan said Air India pays INR160 million (USD3.5 million) daily for fuel. GMR Infrastructure Ltd has also said it will withdraw Air India’s credit facility if dues are not paid by 01-Jun-2011. Meanwhile, Air India reported requested oil companies to provide discounts on aviation turbine fuel (ATF) on par with what is offered to private carriers. Air India has also reported proposed to fly executives of oil firms at concessional rates in lieu of a higher discount on fuel.
Air India to reduce capacity by 10-20% over jet fuel payments
You may also be interested in the following articles...
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.
India’s aviation market surges 20% on economic growth and low fuel prices
Indian aviation is, after many years of promise, seemingly starting to deliver on its potential. It is currently the fastest-growing major aviation market in the world. With strong GDP growth of around 7.5% India is surging ahead of China in the economic growth stakes.
Meanwhile, the decline in oil prices has supported lower fares, driving year-on-year domestic traffic growth in excess of 20%. Its airlines are even starting to make money.
LCC, IndiGo, established less than a decade ago, has become the dominant player in the domestic industry. At the end of the Indian financial year, on 31-Mar-2016, IndiGo was the largest airline in the domestic market with a passenger share of 38.4%, followed by Jet Airways at 20.2%. LCCs accounted for 61.7% of domestic traffic.