Actually the very fact that they are looking at narrowbodies like the 737-800/900 shows a general lack of direction at AI. What are they trying to do? Compete with IC? Instead of taking on EK and SQ, AI wants to buy 738’s and compete with IC!
The 738/9’s are being bought in only to serve the Gulf stations from smaller cities like CJB and TRZ which IC has been servicing satisfactorily using A320’s. Is this the role that AI was created for? AI loves to throw the rulebook at IC whenever there is talk of IC operating more intl. Flights. But the same rulebook is conveniently being sidestepped here!
AI will not bring in any added benefit by competing with IC here. So the big question is that should taxpayer’s money be used when there is no benefit to the Indian public?
It would be impractical to simply restrict IC to domestic routes and AI to intl. Routes. Instead what is required is to rationalize the route structure of both airlines to avoid competition between them. This requires that each carriers role be well defined. I believe IC’s current route structure accurately reflects its role as a domestic and regional carrier. It is AI that needs to rationalize its route structure and remold itself as a long-haul carrier.
What should AI be doing? IMO, AI should be building up its hub in BOM and connect stations in Europe/Africa and the ME with points in the Far-East like HKG, BKK, TYO, SEL and SIN. Ideally, AI should be operating a mix of MCLR category (A330-200/300, A340-300/500) aircraft and Boeing 747-400’s concentrated out of stations like BOM, DEL, COK and MAA. In addition stations like BLR/HYD can be connected with “hub-breakers” to LAX/FRA (imagine HYD-SIN-LAX using A340-500’s or AMD-BOM-JNB with A330-200’s). It is important that AI get out of its flying-bus approach to some routes. A routing like BOM-MAA-SIN is ridiculous since it adds 2-3 hours to what should be 4-5 hour affair non-stop. Is it any wonder that QF and SQ have the BOM-SIN market sewn up? The other state owned carrier IC could operate a narrowbody fleet built around the A32X family on routes across the SAARC region as well as selected routes that are best served by the smaller aircraft.
Cooperation between the carriers has to be improved; “Synergised” to borrow a phrase from our honorable Minister! So AI and IC must co-ordinate their schedules to ensure optimum connectivity. I hear AI is extremely uncooperative as far as adjusting their own schedules are concerned and they expect IC to operate spoke flights at ungodly hours. Co-operation isn’t going to get very far with people displaying this kind of attitude.
Better co-operation between AI and IC can lead to better utilization of AI’s fleet. For eg. The AI flight to JFK goes BOM-DEL-LHR-JFK. With IC operating almost hourly flights between BOM-DEL, it would be better if AI operates BOM-LHR-JFK, with DEL pax coming in on an IC flight from DEL. These pax can check-in and complete immigration formalities at DEL itself. This makes better sense that operating a half empty 747 on the 2-hour flight to DEL. Similarly, IC can co-ordinate with AI to ensure that some AI flights that must operate BOM-DEL (like HKG) can accommodate IC pax as well.
wrt the Gulf and SIN routes where the 2 carriers directly compete, flights to these destinations from BOM, DEL, MAA and COK could be handled by AI while IC could handle the rest like CCJ, BLR and HYD. If this kind of co-operation can be worked out, then AI doesn’t need to get these damned 737-800/900’s.
As long as AI and IC are seperate entities, AI simply cannot afford to delegate a vital component (namely domestic feed) of its network to them. At some point down the line some vague minister may decide to privatize one and not the other and then AI is up the proverbial creek without a paddle.
Point taken. AI needs a domestic feed. But then it can also achieve this by tying up with a local carrier like IC or even 9W. 9W had agreed to operate domestic flights on AI’s behalf, and even a privatized IC can operate these feeder flights, provided they are viable. So impending privatization of IC is hardly any excuse to go out and buy a dozen 737’s! A Hub-and-Spoke agreement is a commercial agreement between 2 corporate entities
IC has no problem operating feeders for AI. It has been doing that for years now! But the thing is that these flights have to be viable. IC subsidiary Alliance operated a number of such code-shares (like DEL-ATQ) using their 737-200’s, which mostly went out with 2 or 3 passengers! AI has failed to deliver its promised loads. Surely you don’t expect even AI to operate a flight with such pathetic loads? I for one don’t believe that AI is going to use these 737-800’s only on domestic extensions.
AI is obviously eyeing flights out of smaller destinations like CJB, ATQ, LKO and TRZ to the Middle East and SIN, which have lately become money-spinners for IC, which operates A320’s from here. These 737-800’s would be perfect for these routes.
The question is if AI can get 737’s to compete with IC on these routes, why stop IC/9W from getting 747’s and flying to London?
Finally, for all your rhetoric about taxpayer money and accountability, Air India has been pretty self sufficient for the last 20 years. All capital improvements have been financed from the open markets and from operational revenues. The only role that the government plays is to guarantee loans from private lenders (since they own 100% of the equity) and to commandeer aircraft for VIP junkets.
First and foremost, the Govt owns AI. The only way a loss-making AI can get its aircraft financed is if their owner, the Indian Govt. stands guarantor. So the Govt.(like any other owner) does have an interest in ensuring that its interests are not affected. Similarly, the Govt. also owns IC.
Now you have a scenario where 2 Govt. owned carriers, instead of complementing each other, are competing with each other. With the arrival of the 738’s, the number of such overlapping routes is only going to increase. Hence the need to rationalize the route structure of BOTH carriers. Since AI has begun long term Fleet planning, it is important to define its role before undertaking that exercise!
Now when we define roles, it is important to apply consistent logic while distributing routes between the 2 state-owned carriers, which I talked about in my earlier post. Unfortunately, no such thing has been done, and such decisions are being taken in an ad-hoc manner.
I think (and hope) that they will opt to renew the long/medium fleet with Boeing 777 variants. IC is already purchasing Airbus. A large order for Boeing would further cement the improved relations that have developed between the two countries since 9/11/01.
Aircraft purchases should not be based on politics. IC was under tremendous pressure in the 1980’s to accept 757-200’s which were too big and unsuitable for IC. Now similar pressure is being applied to make India balance out IC’s order for Airbus with a AI order for Boeing. This is preposterous. The Boeing 777 is a downright bad aircraft for AI, and Boeing itself seems to have realized this, hence these pathetic attempts to apply pressure.
Also, I believe that IC's initial switch away from 757s to A320 was based on French "gifts" being distributed. Bribes are (were) tax-deductible as business expenses in France.
You “believe” that the A320 purchase by IC in the 1980’s was based on bribes being given? Wonder why you don’t think the same about IC’s purchase of 737-200’s in the 70’s? Or Ai’s purchase of 747-200’s in the late 60’s, 747-300 Combis in the ‘80’s and 747-400’s in the late 80’s/early 90’s? I wonder why u brought that in? What are you trying to say? That Boeing doesn’t pay bribes? SQ switched midway to 777’s instead of A340’s. According to one Pakistani web-zine, Gen.Musharrafs nephew is said to have recd “incentives” so PIA chooses 777’s instead of A340’s. But that is because Boeing makes better aircraft! Yeah right!!
The problem seems to be that Americans are very bad losers. A similar excuse was bandied about when Boeing lost out to Airbus for their 707 replacement requirement. AI opted for A310’s instead of 767-200’s, and even then it was alleged that bribes changed hands. I didn’t hear such things when the 747-400’s entered AI’s fleet?
American companies have also famously been involved in bribery scandals across the third world. That’s one problem of third-world countries with centralized licensing procedures, purchasing big-ticket items like aircraft: Bribes are inevitably part of almost every deal including those involving Boeing. So don’t adopt this holier than thou attitude here.
Its funny that you talk of the A320 deal, because that is regarded here as one of those rare deals which were relatively clean.
Apart from bribes, there can be other reasons that make a deal attractive. Airbus has sub-contracted a large amount of work for the A330/340 aircraft (like doors, cargo bay eqpt. etc) to Hindustan Aeronautics. And with Franco-Indian friendship at an all time high, even more is coming in! At one time, there was even talk of transferring the now defunct A300 line to HAL-Bangalore to manufacture freighters. This shows the level of co-operation between Airbus and Indian firms which results in advantages to both parties. It creates jobs within India and improves India’s own aircraft manufacture capabilities. Boeing has nothing of that sort to offer India. Instead of a partnership, it only wants a imperialist, buyer-seller relationship with limited advantages for India.
For the airline concerned also, the A330/340 line offers the advantage of commonality. The importance of the family concept that Airbus is promoting must not be underestimated. IC is now reaping the benefit. It can operate a fleet of aircraft with capacities between 108 (A319), 144(A320) to 167(A321) with the same set of crew and similar maintainance and engg. Procedures. The A320’s with V2500’s is cheaper to operate (though it is said to be a “dog” to maintain). According to some sources, the savings for IC are in the range of 15-25% as compared to 757’s! Imagine if IC had gone in for the 757-200’s then! IC would have to operate a mix of 737-600’s, 800’s and 757s with different sets of crew and operational procedures!
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