Air India has been established to drain tax payer money

Why Air India does losses?
Tarun Chugh is a textile entrepreneur and WWWAS member based in Surat. He has been researching why Air India continuously ignores Surat even though their subsidiary Alliance Air earns amongst the highest per passenger revenue from Surat as against their other favored airports. The research has been carried out after filing umpteen number of RTI applications.

The response to these applications were delayed to frustrate the applicant and also to try and cover up their losses they are deliberately making.

Research on Air India Regional operation for Delhi - Surat - Delhi Sector

• By the last count Air India has done thousands of crores of losses to the Indian exchequer. The tax payers money which could have gone for healthcare, sanitation, education,welfare or poverty alleviation has been wasted on running a maharaja without wheels.
• For any enterprise the primary motive should be profitability but profit is a dirty word for Air India.
• Case in point is the Surat sector. Surat is the eighth largest city in India with the highest per capita household income of 4.5 lakhs per annum. It's a bustling city of 5 million with a combined GDP of $40 billion . But it has a dubious distinction of having the worst air connectivity in the world for a city of its size.

• Air India is the only carrier which provides a single flight with a 72 seater plane to Delhi from Surat. It's a monopoly carrier which refuses to add capacity to the Surat sector. Any other airline other than Air India, would have by now started new frequencies and connections to other cities from Surat but for Air India profit is a dirty word.
• From information available from Air India through a series of RTIs the RPK (revenue per kilometer / passenger) is Rs.6 for the Delhi - Surat sector. The average cost for Air India is Rs.3.5 per kilometer / passenger which means Air India earns Rs.2.5 per kilometer per passenger on the Surat -Delhi sector. Put this into perspective, this translates to about Rs.2,500 per passenger on a single flight. The average load for Air India is about 55 pax so on each flight Air India earns Rs.1,25,000. Thus on a single day Air India earns approx 2.5 lakhs in a single day from Surat.
• Inspite of being profitable on Surat-Delhi sector air India has never bothered to increase the capacity by employing bigger air crafts nor it has provided the much wanted connectivity to Mumbai.
• Profit is not a primary objective of air India is also proven by the fact that it operates a bigger plane with more frequencies on Delhi - Baroda sector. The RPK (revenue per km/passenger) on Delhi - Baroda - Delhi sector is 1.75 which means Air India does a loss of Rs.1,385 per passenger flown on the Baroda - Delhi flight. Air India operates a 140 seat Airbus A319 with 70% load factor. By this it is clear that Air India does a loss of 1.4 lakhs per flight on Baroda - Delhi flight which means each day Air India is losing Rs.2.8 - 3 lakhs on this sector.
• It's clear from the above example that Air India is not a profit focused air line. Air India has an opportunity to earn profits in the Surat sector which for reasons unknown it continues to ignore.

Editor comment: Air India defies logic by classifying Delhi - Surat sector as a regional route. The eighth largest city in the country is over 1,200 km from the capital by surface transport and a flight time of nearly 110 minutes. Considering the amount of travel between the 2 cities, this cannot be considered as a regional route.

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Tarun Chugh


Air India has been established to drain tax payer money by Tarun Chugh is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.