Air India suffers Rs.20 crore a week due to Dreamliner not being operational !!!!

A very different one ~ TOI reports that over 1,000 Air India boarding passes were recovered from a passenger at the Kolkata airport on Friday, 29^th Mar 13. The recovery triggered alarm bells in security circles as boarding passes are critical documents that allow passengers access areas usually out of bounds to anyone other than genuine airport users. The passes were recovered after a SpiceJet security staffer manning a baggage X-ray monitor became suspicious after he discovered a box in Satyendra Verma's bag that appeared to be full of currency notes.

There is no restriction on carrying money other than during the election time. But the official decided to check the bag, leading to the recovery. The passes were all blank without any details printed at the check-in counter and printed in Mumbai. All the passes appeared to be original.  Verma (42), a Nalanda resident claimed himself to be a farmer and  told his interrogators that his brother-in-law had given him the box and he was clueless about what it contained. He was to carry it to Port Blair and handover it to somebody else.  Police are trying to verify the claim.

The Maharaja – Air India, the flag carrier airline of India is not in great pink.  From its days of glory,  AI has slipped to 4^th place in domestic aviation sector following economic losses in 2012.  From being the largest operator in the Indian subcontinent to be relegated to, behind low cost carriers like IndiGo, Spicejet, and its full service rival Jet Airways does not augur well for the Nation. Following its merger with Indian Airlines, Air India has faced multiple problems, including escalating financial losses.  Not all is well for the State-owned AI which is having multiple problems, such as enormous market share losses, declining profits, and escalating labour disputes. An official panel that recommended measures to enhance savings of ailing Air India, has suggested that the national carrier take cue from no-frill airline model and prune costs, including those on its 26,000-strong staff.  The five-member panel headed by IIM-Ahmedabad Prof Ravindra H Dholakia is understood to have recommended that the airline conduct technical efficiency audit for manpower rationalisation. Understand that there are slew of recommendations made by the panel  including suggestion that the national carrier should seek government nod to issue tax-free bonds of Rs 10,000 crore to enable it retire its high-cost debt.  Noting that passengers buy tickets from agents and the airline ends up paying one per cent commission to them, the Dholakia panel has suggested shifting to the 'zero commission' norm as per global practice and asking agents to charge a service fee, the sources said.

I had earlier posted about the dream plane - American aircraft manufacturer Boeing's most-anticipated passenger jet - the 787 Dreamliner aircraft from the stables of Boeing - The Boeing Company is an American multinational aerospace and defence corporation, founded in 1916 by William E. Boeing in Seattle, Washington. Boeing is among the largest global aircraft manufacturers by revenue, orders and deliveries.  It was touted to be most fuel efficient and very passenger friendly with host of new features.   The aircraft was expected to become the mainstay of AI’s global operations and was being touted as key to its turnaround plan. For AI, the plane has been configured to have 256 seats — 18 full-flat business class seats and 238 in economy.

There was trouble on air and dreamliners globally were grounded in Jan 2013  arising out of trouble linked to battery failures.  First ANA and Japan Airlines announced that they were grounding their Dreamliners pending an investigation; Chile-based LAN Airlines followed and soon Air India also grounded its fleet of six Boeing 787 aircraft under orders from Indian aviation authorities. 

Apart from the safety concerns, these grounding  meant more bad news for the loss-laden Air India, which had pinned its hopes on returning to profitability by making intelligent use of the Dreamliners instead of fuel guzzling 777s.   Now Firstpost reports that Air India suffers ‘Rs 20 cr a week loss due to idle Dreamliners’.

Firstpost report on 28^th Mar 13 states that the  losses Air India is incurring due to grounding of its Boeing 787 ‘Dreamliner’ fleet have risen to as much as Rs 20 crore a week. Since 17 January, when the Federal Aviation Administration (FAA) of the United States asked airlines around the world to grounded B787s due to battery problems, Air India has had to implement a major restructuring of its fleet utilisation. Air India is the only customer in India to have ordered and received l6 B787s till now. It was scheduled to receive two more by March this year besides another six till March 2014. So in all, as per the original delivery plan, the airline would have had 14 Dreamliners in its fleet by March next year. In the initial weeks, we were told that schedule restructuring and use of other, less fuel efficient aircraft was costing Air India Rs 30-40 lakh a day incrementally. But speaking to reporters today, Civil Aviation Minister Ajit Singh said, “Air India’s losses from Dreamliner grounding are Rs 20 crore a week….thats what I remember being told”. This means the daily loss has climbed to over Rs 2.86 crore a day!

Singh said the airline will seek compensation from Boeing for the grounding but did not specify how much. He agreed that it could be adjusted against future orders but no decision has yet been taken on how much compensation will be sought and in which form. Separately, aviation regulator DGCA said on Tuesday that there was no confirmation on whether the Dreamliners would be certified fit for flying in April. Boeing has begun some test flights at its end but no dates have been announced by when it will certify all the 50 Dreamliners sitting on the ground around the world would be allowed to fly.

When the Dreamliners were grounded in January, the Mumbai-Singapore and Chennai-Singapore flights of Air India were combined and operated on an Airbus 330. “This means the Mumbai passengers to Singapore have to stop in Chennai, which many do not like. But we were left with no other option,” an airline official had said at that time. Also, Air India had to cancel its five-times-a-week service between Delhi and Narita airport in Tokyo because of Dreamliners’ grounding. But it has continued to serve the two overseas destinations of B787s by deploying B 777LRs on Paris and Frankfurt legs. Sources within Air India have earlier acknowledged that Dreamliners have given the airline myriad problems in the last few months. These include an instance when the doors of a Dreamliner cargo flight would not close, once the air conditioning system did not function inside the aircraft and there have been problems of fuel leakage too. But all these instances were seen as “routine” with airline officials saying such problems occur with many new aircraft but are corrected by the manufacturer as time goes by.

Dreamliners are the backbone of Air India’s revival. Though flights to Paris and Frankfurt are not affected as yet, Air India’s plan to become the only Indian airline to launch direct flights to Australia this summer is already in shambles.

With regards – S. Sampathkumar

30^th Mar 2013.