Nacil losing Rs2,000 cr on overseas routes

Nacil, the loss-making national airline, has cited many historical wrongs for its present financial situation. But in a deposition before the Parliamentary Committee on Public Undertakings (Copu) recently, the airline has presented some startling facts.

In the matter of international routes, Nacil pointed out that current long haul operations are “giving rise to cash deficits”; so further international route expansion is meaningless.

In a related reply, the civil aviation secretary pointed out that as many as 29 international routes bring in losses of about Rs 2,000 crore “and we are re-examining some of these things.” Just two flights-Mumbai-New York and Delhi-New York non-stop services-accounted for a loss of Rs 750 crore last year!

Nacil pointed out that additional capacity deployment on international sectors would be detrimental. “This situation has come about in the wake of intense competition and adverse developments in the airline’s operating environment. Nacil pointed out that competitors have deferred expansion plans and reduced operations in some cases.

Then, Nacil’s chairman and MD has clarified that granting of bilateral rights to new players has not led to granting of profitable routes to other carriers, at the cost of Nacil’s profitability. “It is incorrect to say that more profitable routes have been given to private airlines as compared to Air India. As a policy, due consideration is given to the operational plans submitted by Nacil before allocation of traffic rights to the other eligible applicants. Only on exercise of the first right of refusal by AI for operations on particular international routes, such rights are considered for giving to other Indian private scheduled operations.”

This admission comes after months of carping about granting new bilaterals, when Nacil has often represented to the civil aviation ministry objecting to such rights being given out to foreign carriers from other countries.