Indian is fast losing govt fliers to private carriers

Indian is fast losing govt fliers to private carriers
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First Published: Thu, Mar 08 2007. 01 02 AM IST
Updated: Thu, Mar 08 2007. 01 02 AM IST
Central government employees, once mandated to travel by stateowned airline only, are now joining millions of Indians flying low-cost carriers.
Nine months after the Centre allowed government workers to fly by discount airlines, between 20% and 25% of employees, who are eligible for air travel, have shifted to the private discount airlines.
Until June last year, government employees were allowed to fly only Indian for their domestic air travel. The impact of the churn of government passengers from the airline to other carriers was not immediately available.
Data available from stateowned Balmer and Lawrie, a travel agency that handles about 70% of travel bookings for the government, and Ashok Travels, which handles most of the rest, the shift has been 30% and 15%, respectively, between June and December 2006.
About 32.2 million passengers flew commercial airlines in India in 2006, nearly double the number two years before. Indian skies boast of six lowcost domestic carriers that have been steadily increasing their market share over the last three years. Air Deccan, SpiceJet, Go Air and Indigo, the top four budget airlines, fly one in three air passengers in the country.
Indian said nearly half of the loss of its share from government-employed passengers was because of new routes coming up on India’s air-map. “Connectivity has gone up drastically and people have much more options to choose from even in sectors that once never existed,” Vishwapati Trivedi, CMD, Indian, said. The airline has not added significantly to its fleet and this has contributed to the churn among government passengers, he added.
While having multiple choices to fly has come as a welcome change, government officials still prefer Indian.
“There are issues of buyback with the low-cost carriers,” a senior executive at Ashok Travels, who requested anonymity, said, adding that Indian has been quick to redefine its pricing and introduce add-ons, including free companion tickets, complimentary upgrades and sky miles.
A proposal that will allow government employees to use not just Air India for international travel is pending for four months, but officials say the government sees little reason to relax them. “Of about 30 lakh Central government employees, only a few travel abroad. So, its not a necessity,” a finance ministry official said.
With the Air India and Indian set to merge, it is still not clear whether the policy for international travel will be changed.
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First Published: Thu, Mar 08 2007. 01 02 AM IST
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