Air India mulls new routes; to complete 75 per cent of merger by March 2009

Hyderabad: Air India is optimistic of starting operations on routes where it currently has no services. The flag carrier is also planning to complete the process of setting up strategic business units (SBUs) for its ground handling, maintenance, repair and overhaul (MRO), and training functional areas by mid-2009.

Speaking to the media, Air India chairman and managing director Raghu Menon said AI was evaluating possibilities for launching flights to the West Coast of the US, and to South Africa and Australia. The airline does not fly these routes currently. He said that fuel prices were to stabilise below $80 a barrel, Air India would have double-digit growth, and would be leveraged enough to look at some more new routes.

The price of aviation turbine fuel (ATF) has forced the flag carrier to cut capacity in terms of number of flights and also the number of routes by 12-15 per cent. The airline does not have plans to further reduce ticket charges in the near future, said Menon.

He said the airline's load factor was currently around 62-64 per cent, against the ideal 74-75 per cent. The airline will add the Airbus A-319 into its fleet this month, having received 38 of the 111 aircraft it had ordered. Another eight aircraft would come by this year-end, and the order is expected to be completed in entirety by 2012, at an outlay of around Rs44,000 crore.

Menon expects the merger of Air India and the former Indian Airlines to be completed by June 2009, and says that 75 per cent of merger will be completed by March 2009. He said HR would remain to be integrated after March 2009, and announced that there would be no retrenchment of employees. He said that in the non-operational areas, recruitment has been stopped, and the airline presently has 32,000 employees.