The gloves are off and Air India finally seems to be getting into network planning mode. Maybe they now see a realistic chance of getting some Boeing 787 planes, while the controversy about who will fund this purchase goes on, and whether Boeing owes Air India a compensation of USD 1 billion.
So, an Australian delegation hit up India earlier this week for trade talks, and at the end of this trip, the famed Delhi – Melbourne dreams of Air India were revived. Air India has been planning to launch this money-sucker route since 2010, and has postponed the launch dates two times already from 2010 to 2011 and now into 2012. The initial plans were supposed to make it a B777-300 ER service, and quoted to be unviable.
Now, Air India plans to launch a direct Delhi [DEL] – Melbourne [MEL] service riding on its new B787s, which AI finally expects to receive in May 2012 and induct in its fleet shortly after. Since these are just plans, it might well turn out to be a different route later, but this is the route that is being toyed around with right now. 6,300 miles apart, Air India clearly hasn’t picked up the experiences of other carriers operating ultra-long hauls and burning their fingers. Or this is clearly another experiment to waste some of my money (as a taxpayer!).
The media quotes that an estimated 335,000 passengers move between India and Australia every year, and this traffic is largely shared between Sydney and Melbourne. Rumor is that AI has extracted significant concessions from the Australian government to operate these flights, which makes their bean counters sure that this route will be cash positive in the first year itself. Other rosy dreams for Air India include the possibility to garner traffic onward to the Middle – East and London via Delhi.
The configuration of the new 787s puts me to doubt on this, since the first 7 B787 planes to be delivered to Air India will have a 16 Business / 256 Economy configuration. No First Class. Not that I am a first class traveller (business/economy for me!), but a significant number of the business jetsetters take the premium cabins. And add the fact that these business travellers would be the people who’ll be taking the onward flights most probably. So, one revenue generating market killed easily. Now, AI will bank on the VFR segment to fill the 256 seats, like it does on DEL-ORD-DEL and depress pricing.
What also beckons explanation is, that if India – Australia traffic is profitable indeed, what made Qantas shut down their Mumbai – Sydney direct in 2010, where it was losing about $20 million per annum? The Mumbai – Singapore segment of its one-stop flight to Brisbane also is being wound up on 6th May 2012. American Airlines recently cut down its longest flight ORD-DEL-ORD and this stops on the 1st March 2012. Ultra-long hauls are a tradeoff between fuel and cargo where fuel wins (obviously!), and the whole plan sounds like another losing proposition to me.
My vote is not for this one! What do you think?
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