Mumbai: Air India Ltd (AI) will break with tradition this year and won’t be ferrying those of the country’s Haj pilgrims who are picked by the Haj Committee of India. Part of the state-run carrier’s traditional task will be carried out by SpiceJet Ltd, the country’s second largest low-fare airline.
Saudi Arabian Airlines will fly nearly half of the 125,000 Haj pilgrims who will be chosen by the Haj committee this year, two officials at the aviation ministry said.
The officials, who spoke on condition of anonymity, declined to divulge financial details and the exact break-up of the allocation.
The right to transport these Haj pilgrims was till now exclusive to state-owned Air India, but the cash-strapped firm has backed out from most of the stations, citing capacity constraints.
Special flights: A file photo of an Air India plane at the Mumbai airport. Photo: Indranil Mukherjee/AFP
Air India used to lease planes from private carriers and ferry passengers till last year. The government airline only bid for the transportation mandate from Srinagar, which it lost.
The ministry had floated a tender for providing air travel services, on a charter basis, to pilgrims sponsored by the Haj committee in 2012.
These special flights operate between September and December from places that include Srinagar, Varanasi, Ranchi, Mumbai, Mangalore, Lucknow, Kolkata, Jaipur, Indore, Hyderabad, Guwahati, Goa, Gaya, New Delhi, Chennai, Kozhikode, Bhopal, Bangalore, Aurangabad and Ahmedabad to Jeddah in Saudi Arabia.
SpiceJet chief executive officer Neil Mills did not return calls seeking comment. Saudi Arabian Airlines could not be immediately reached for comments.
SpiceJet shares on Thursday ended at Rs 31.70 on BSE, down 0.16%, while the benchmark Sensex rose 1.18% to 16,649.05 points.
Since operating the Haj flights is determined by lowest bids, it is difficult to say whether they are profitable, Mahantesh Sabarad, senior vice-president (equity research) at domestic brokerage Fortune Equity Brokers (India) Ltd.
In 2011, each pilgrim paid Rs 16,000 to the Haj committee and the government subsidized Rs 48,380 per pilgrim, which it gave to Air India and other international carriers, according to the data available with the ministry of external affairs.
An estimated 125,000 pilgrims travel for the annual Haj from India with state subsidy, while an additional 50,000 travel privately. Estimated subsidy cost to the government in 2011 was around Rs 600 crore, according to the aviation ministry.
According to Sabarad, it will require some 800 landings at Jeddah airport to transport so many pilgrims in 60 days with a fleet of seven-eight narrow-bodied aircraft, or some 500 landings by five-six wide-bodied planes.
“Now, broad calculations suggest if each batch of 180 passengers are carried to and from, the airline earns Rs 1.16 crore at Rs 64,380 per passenger. Assuming the aircraft does two empty flights for each such batch, at a cost of Rs 4-4.2 per seat km, the total cost of flying amounts to Rs 1.44 crore to Rs 1.51 crore,” Sabarad said.
“It means it is clearly unremunerative to fly. Unless of course the per-passenger subsidy is raised to somewhere around Rs 64,000-68,000,” he added.
Besides, it is difficult and cumbersome to recover all the dues from the Haj committee through the external affairs ministry and involves a potential credit risk, he added.
An Air India executive said his carrier had only bid for carrying passengers to Jeddah from Srinagar, but SpiceJet outbid the government carrier.
“We were carrying Haj pilgrims by leasing planes. Besides, we do not have sufficient planes to deploy for these chartered flights,” the official said, requesting anonymity. “The strike has nothing to do with the Haj pilgrim bid.”
A section of Air India pilots, who fly on international routes, are on strike for the past 31 days over wages.