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Delhi-London route: Nacil opposes Kingfisher

Delhi-London route: Nacil opposes Kingfisher
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First Published: Mon, Aug 24 2009. 10 08 PM IST

 Taking no chances: An Air India aircraft at the Mumbai international airport. Air India and its rivals are already facing challenges from the economic slowdown that has hurt air traffic growth. Abhij
Taking no chances: An Air India aircraft at the Mumbai international airport. Air India and its rivals are already facing challenges from the economic slowdown that has hurt air traffic growth. Abhij
Updated: Mon, Aug 24 2009. 10 08 PM IST
Mumbai: State-owned National Aviation Co. of India Ltd (Nacil), which runs flag carrier Air India, has written to the ministry of civil aviation asking it not to allow Kingfisher Airlines Ltd to operate on the New Delhi-London route, said two Nacil executives familiar with the matter.
Taking no chances: An Air India aircraft at the Mumbai international airport. Air India and its rivals are already facing challenges from the economic slowdown that has hurt air traffic growth. Abhijit Bhatlekar / Mint
Nacil noted in the letter that Kingfisher Airlines, India’s second largest carrier by passengers flown, was already discontinuing its Bangalore-London service because of mounting losses.
The letter cited excess capacity on the India-UK sector and potential losses to Nacil should Kingfisher also be allowed to fly New Delhi-London, said the two executives, who didn’t want to be named because they are not authorized to speak to the media.
“Adding more capacity on New Delhi-London route will result in further losses for all carriers operating in that sector,” one of the executives said.
Getting approval to fly on the new route is important for Kingfisher Airlines, controlled by billionaire liquor baron Vijay Mallya, to keep its landing slot at London’s Heathrow airport, which will fall vacant once it ceases its Bangalore-London flights. Airport slots are hard to come by at Heathrow, and Kingfisher had bought the slot from KLM Royal Dutch Airlines in early 2008 for an undisclosed sum.
Kingfisher Airlines, Jet Airways (India) Ltd, British Airways Plc. and Virgin Atlantic Airways Ltd operate on the India-UK route.
In a statement on 11 July, Kingfisher Airlines said it would suspend its Bangalore-London flights and its Colombo-Bangalore feeder service beginning 15 September. The airline said it had applied to the ministry of civil aviation to start operations on the New Delhi-London sector and that it would announce launch dates once it got the go-ahead.
Air India and its rivals are already facing challenges from competition, excess capacity and the impact of the economic slowdown that has hurt air traffic growth. With accumulated losses of Rs7,200 crore and debt of Rs15,241 crore at the end of June, up from Rs6,550 crore in November 2007, cash-strapped Nacil has sought a loan and equity infusion of around Rs15,000 crore from the government.
A senior official at the ministry of civil aviation said the ministry had already asked Jet Airways and Kingfisher Airlines to explain why they hadn’t been flying on some international routes they had been given permission to operate on, and was awaiting a response from the carriers.
“We have not given approvals for Kingfisher Airlines to fly New Delhi-London,” said the official, who didn’t want to be named. “We will take a final view on route approvals only after private carriers respond to us.”
A senior executive at Kingfisher Airlines confirmed that the carrier had not yet received permission to offer New Delhi-London flights. The airline is expecting resistance from the ministry, given the government is attempting to turn around the national carrier, said the executive, who didn’t want to be named.
Kingfisher Airlines spokesman Prakash Mirpuri and Nacil spokesman Jitender Bhargava declined to comment for this story. Nacil chairman and managing director Arvind Jadhav could not be contacted.
Intensifying competition, Jet Airways is also in the process of expanding its capacity on the New Delhi-London route, starting in October, by replacing its 220-seat Airbus A330 plying on the route with a 312-seat Boeing 777.
On 17 August, Anita Goyal, executive vice-president (network planning and revenue management), had said in an interview that Jet Airways’ London operations will become profitable during this winter schedule, which lasts from October through March.
“I wish them all the very best,” Jet Airways founder chairman Naresh Goyal said when asked what would be the impact of Kingfisher’s entry in the New Delhi-London route.
Employees of Air India, claiming that excess capacity is the primary cause of the airline’s troubles, have appealed to Prime Minister Manmohan Singh for government intervention.
In a recent letter to Singh, they sought “directions and guidelines so that the domestic operators do not operate flights to one and the same destinations more than their requirements”.
An airline consultant, who didn’t want to be named, said restrictions would not help.
“These are not the ways to save Air India,” he said. “For that you will have to take harsh steps. You cannot deny an airline’s right to fly any destination, once that carrier is eligible to fly overseas.”
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First Published: Mon, Aug 24 2009. 10 08 PM IST