Thursday, March 29, 2012

Direct India flights nearer


THE long-proposed, oft-postponed promise of direct flights from India to Australia could come as soon as the end of the year, and Australia's two largest cities remain in the hunt as the preferred destination.

India's civil aviation authorities have formally given permission to Indian airlines to fly direct from Delhi to Melbourne, and from Delhi to Sydney.

The civil aviation ministry's ruling gives government-run Air India first right of refusal on the sector, and despite a grim business outlook, the flag carrier is keen to pursue direct flights to Australia, servicing the student, tourist and business markets.

Air India must first wait for its new 787 Dreamliners from Boeing, also much-delayed, but which it now expects to receive midyear.

A civil aviation ministry official told local media the mid-sized 787s were crucial to the government airline regaining some competitiveness in India's cutthroat airline industry.

''Air India has proposed to launch direct services to Australia from Delhi commencing about the third quarter of 2012-13 [October-December, the Indian financial year begins in April], using the Boeing 787 aircraft, which are expected to be inducted in May this year.''

Both Victoria and New South Wales are keen to have the flights landing at their capital.

Victorian Premier Ted Baillieu met with Indian Civil Aviation Minister Ajit Singh in Delhi last month, and pitched Melbourne's credentials. ''With [a] sizeable Indian population residing in Melbourne, a Delhi-Melbourne direct Air India flight would be in their larger interest and also in the business interest of the two countries,'' he said.

Before that, NSW Premier Barry O'Farrell visited the Indian capital in November, meeting with Air India, privately run Jet Airways, and civil aviation authorities.

''There is no doubt that if there is to be direct flights to Australia, I'd like them to be to Sydney … the business-case model, for putting flights into the jurisdiction with the highest number of Indian students, the most people of Indian background, and the financial services capital of Australia … is a no-brainer," he told BusinessDay.

It is understood the Victorian and NSW governments would be willing to offer significant concessions to Air India to have their city preferred.

Indian estimates suggest the air traffic between India and Australia's two largest cities is fairly evenly split. Civil aviation ministry figures quoted by The Economic Times say 125,000 passengers fly between Melbourne and India, against 130,000 to or from Sydney. The total number of passenger movements between the two countries is about 335,000 passengers a year.

For all its expansionist talk, Air India faces a difficult time ahead. The airline currently carries an astonishing $US12.9 billion ($A12.3 billion) in debt, and will finish this financial year at the end of this month with a loss of nearly $US1.3 billion.

All of India's aviation industry is under serious pressure at present, as rising fuel costs and unmanageable debt cruel profits. Kingfisher, once one of the shining lights of Indian multi-industry enterprise (the company makes beer as well as flies planes), is haemorrhaging money. It has grounded three-quarters of its fleet, and has been unable to pay staff since December.

Read more: http://www.brisbanetimes.com.au

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