Air India to drive long haul direct, 2006-07

Air India is intent on enhancing its long haul strategy with a particular focus on direct flights on key routes to North America, Africa and Europe. The imminent merger with Indian will translate into a fleet re-allocation that will enable Air India to ramp up its existing long haul routes and add new ones significantly to Mauritius, Australia and Eastern Europe besides the possibility of direct flights to New York on the ultra long haul Boeing aircraft that should be delivered next year. Air India has appointed a consortium led by Accenture as consultant for its proposed merger with Indian.

Shedding more light on the fleet re-allocation post merger, Air India CMD, V Thulasidas, says, "As the two airlines are merged and begin inducting new aircraft, the new entity will have the critical mass to be a serious international player. A larger network with an enhanced regional and national hub strategy will also help the new entity take advantage of the fact that we can operate direct flights to all long haul destinations. In the case of competition, not all of them have the rights to do so."

Potential regions for direct services include Mauritius and Australia while more flights to New York and more European destinations in Eastern Europe are a distinct possibility.

Air India has medium to long haul while Indian has short haul. The A320 family ordered by Indian, 737-800 of AIE will be short haul and 747, 777 and 787 will be long haul. The airline has not ruled out the possibility of joining an airline alliance which, Thulasidas says, is essential from the point of view of global reach. It has to compliment the growth of the airline. The merger is a pre-cursor to joining an alliance and would only then make sense from a leverage perspective. The new entity could also have a formidable status in store for its low-cost Air India Express which may also be named differently, following the integration of its operations with Indian subsidiary Alliance. Air India Express is currently the only Indian low-cost carrier that operates overseas, to the Middle East.

A company for MRO and ground handling has been set up and will become more active as the merger fructifies. The new entity could potentially be a Rs 130-billion airline with a fleet size of 130 aircraft.