David - Under the present bilateral, both BA and AI are granted traffic rights to 16 weekly services between Heathrow and India. These slots can be distributed between the gateways of Mumbai, Delhi, Calcutta and Chennai as the airline chooses.
However, AI has never been able to utilize these traffic rights completely because LHR restricts the number of take-off/landing slots available to AI. Presently AI operates daily service through LHR to JFK and thrice weekly service to ORD, plus the new LHR terminator. Hence, there are 5 AI frequencies that are going to waste because AI is unable to obtain landing slots at LHR. In the meanwhile, BA operates daily non-stop service from LHR to both DEL and BOM, as well as twice weekly non-stop service to MAA, using all 16 of their frequencies.
AI has gotten around this problem by allowing VS to codeshare with them twice weekly on the LHR-DEL sector. This benefits both carriers immensely since VS gets access to an excellent market, while AI is able to utilize the excess capacity created. The irony of the situation is that VS is operating these flights as an INDIAN carrier under the bilateral, because of the codeshare with AI. As a result, DEL-LHR now has a DAILY nonstop flight with an AI code. Similarly, BOM-LHR has 6x weekly nonstops, with a total of 11 direct flights (5x through DEL).
Roy - YYZ service is possible, but not likely in the near future. YVR isn't even in consideration right now.
Zizou - You are correct about AI having a great history with Australian operations. PER used to be a crew base for AI (with crews operating to/from Singapore, Sydney and Nadi) from the early 60s all the way up to 1986 when they pulled out of the market for the first time. The airline had very good brand recognition there. I remember living in PER when my dad was posted there in the early/mid-80s and there were constant print and TV ads touting the airline.
The services to PER were initially 707s on the BOM-MAA-SIN-PER-SYD-Nadi milk run (this was in the 1960s), then when AI pulled out of Fiji in the 1970s they became BOM-MAA-SIN-PER-SYD with the 707. Once the second wave of 747 deliveries began in the late 70s/early 80s the service switched to 747s and BOM-SIN-PER-SYD (with connections from the Airbus service MAA-SIN for the South Indian pax). In June 1985, AI made the decision to close the PER crew base at the end of the year (and I remember crying over that decision aged all of 8 years!) and the service became BOM-SIN-SYD with 747. Around 1989, during the Rajan Jetley years, AI decided to pull out of the SYD market and reintroduce service to YYZ instead (which had been suspended since the bombing of AI 182 in 1984). There was no service to Australia for a few years and then PER came back online with A310 service on BOM-BLR-SIN-PER. However, this was during AI's huge push for SIN expansion (when they introduced non-stops from BOM, DEL, MAA, CCU, BLR, HYD and TRV) and the SIN market was oversaturated by AI. These flights were not too succesful so they pulled out of the market in 1995 and it has been that way since.
"The A340-300 may boast a long range, but the A340 is underpowered" -- Robert Milton, CEO - Air Canada