News
Air India profit-bound while Bhatia “displeased” with AirAsia investment
December 18th 2015
For the first time since its merger with Indian Airlines in 2007, notoriously broke and chronically tardy flag carrier, Air India, is set to post an operating profit of “six to seven crore rupees” ($0.96-1.12 million) this financial year, Read More » due to a combination of factors, including lower fuel prices and savings from operating the B787 Dreamliner.
"These (Dreamliner) aircraft have reduced our operating costs and increased our operating revenues in recent years. We will post an operating profit of between six to seven crore rupees this year," Anil Mehta, the Officer on Special Duty (OSD) to Air India Chairman and Managing Director, Ashwani Lohani, said in a Delhi news conference on Tuesday. Another sign of optimism at the carrier was the announcement on the same day that the airline has started its daily B787 Ahmedabad-London service, a route it had cancelled when it was flown by the larger B777.
India’s second largest full-service carrier, Mumbai-based Jet Airways, will cease all operations to the U.S. and Belgium after March 27 as it closes its scissors hub at Brussels and establishes a presence at Amsterdam’s Schiphol Airport. It will launch daily Delhi-Amsterdam and Mumbai-Amsterdam services from late March, with A330-300 aircraft, and codeshare with KLM Royal Dutch Airlines and Delta Air Lines on the routes, as well as to 30 destinations in Europe and eleven in North America operated by the two the European Skyteam carriers. Jet will continue to serve Toronto daily from Amsterdam using its own metal.
Jet is 24%-owned by Etihad Airways. When asked how Etihad’s involvement in Jet fits with Delta’s view that Gulf carriers are violating Open Skies agreements, the Atlanta-based carrier said its views have not changed. “Etihad owns a minority investment in Jet, but this doesn’t change the fact that Gulf carriers have deeply distorted the playing field on international flights to India, in violation of open skies agreements,” Delta spokeswoman Kate Modolo told ATW. “In the meantime, Delta would prefer to serve the Indian market through direct service from the United States, but is forced to find ways to adapt and this codeshare is beneficial to Delta customers as well as Jet’s,” Modolo added.
At AirAsia India, investor, Arun Bhatia, owner of Delhi-based investment firm, Telstra Tradeplace, has claimed AirAsia India was effectively controlled by the AirAsia Group in Malaysia, a situation that contravened Indian investment laws. Speaking to India’sThe Economic Times, disgruntled Bhatia said AirAsia India chief, Mittu Chandilya, was only a figurehead who acted on the instructions of AirAsia Group's chief, Tony Fernandes. He also claimed his concerns about the LCC’s poor financial performance and the AirAsia Group’s associated 'back-end' insurance and MRO contracts either had been dismissed or simply ignored by other shareholders.
"I was promised at the last board meeting in November that the issues I have complained about would be resolved. They have not been resolved so I decided not to attend the next meeting," he said, and added he would pursue his concerns either in India’s courts or with the Indian government. "I will neither invest further, nor use the right of first refusal this time until the airline improves its performance and I am given details of all the matters I have raised," he said.
