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Aviation History
1983
1983 - 0187.PDF
Bhubaneswar exemplifies the primitive airport facilities the airline faces to think of itself as one of India's most important "sine qua nons " in terms of the social function it provides. But the carrier firmly believes that its largest single objec tive is to make money. One important aspect of this aim involves the promotion of tourism in India, from the point of view of both the airline and the national econ omy. An Indian Institute of Management study showed that every 100 Rupees a tourist spends directly on travel, hotels, and shopping results in 350 Rupees being -•^pent within the domestic economy. The crucial role Indian Airlines plays in the social and business life of India does lead to a commercial dilemma, which the airline has to resolve as best it can. As Jamalabad points out, the airline cannot always both be profitable and undertake the tasks expected of it. Nevertheless, it does succeed remarkably well—Indian Air lines made a net profit of approximately $12 million in the last financial year, and hopes at least to break even this year. The break-even overall load factor for this year has been estimated at about 65 per cent; the airline was right on this mark in the six months from April to September, and winter is traditionally a much better time. Foreign tourists swell passenger figures during the more temperate winter months, and there is more domestic tourism. But the airline expects tourist traffic to be disappointing this year. Although foreign exchange earnings for the first five months of the year were slightly up on the same period in 1981-82, they were much lower than budgeted for. About $50 million in foreign-exchange revenue was expected, but only $42 million was achieved. Normally about 30 per cent of Indian Airlines' total revenues are in foreign currencies. About three-quarters of IA's total traffic comes from business flying. Of this, about two-thirds is made up of commercial business, and the rest comes from Governmental and public-sector industry travel. The nationalised industries play a particularly important part in Indian life, and in IA's traffic. Investment in the public sector is estimated to be 60 per cent of the total organised investment in the Indian Airlines' route network covers most major cities in the country country, and nationalised-industry travel forms about 20 per cent of the airline's business. About 20 per cent is tourism, and only 5 per cent self-paying local traf fic. Most of the latter business arises in the far east of India, where ground trans port is poor and the terrain difficult. According to Jamalabad, there is no point in the airline promoting business travel by advertising. Taxation levels in India are so high that even the highest- paid executives can't afford to fly often on personal travel. This is despite the fact that India likes to pride itself on the low price of its domestic air fares. Requests for fare increases are a highly political issue, and Government approval often takes about two years. Even then, approval is usually given for only a fraction of what IA requests to keep up with cost increases. Indian Airlines is not a big cargo carrier. At present, less than 10 per cent of its business comes from freight. Unfortunately for the airline, on many routes where it has excess capacity for cargo (mainly in the belly holds of its A300s) the market for high-priority or high-value cargo is poor or good road services exist. Even worse, where there is a potential market the airline does not have the cargo capacity: many of its 737 routes fall into this category, and the 737 has very limited space for freight. Indian Airlines' technical standards are as good as those of any other airline in the world, and better than many. The carrier takes pride in the fact that it has never sent a 737 abroad for maintenance, and only twice has it needed to bring a Boeing technical team to Delhi with support equipment such as jigs and fixtures. Now the carrier has built its own jigs and tool ing for all crucial maintenance jobs. According to P. N. Kumar, chief engineer for the airline's Northern region, by carrying out its own maintenance on its 737s and A300s Indian Airlines pays only about 30 per cent of the costs it would incur by contracting out the work. Engineering director Dharam Vir esti mates that about 99 • 9 per cent of 737 air frame maintenance is performed in-house, and so is 80 per cent of A300 airframe work. Indian Airlines carries out about 40 per cent of A300 CF6 engine maintenance; Air-India does the rest. In return Indian Airlines is doing all of Air-India's A300 heavy airframe maintenance. It is largely due to IA's expertise that Air-India could introduce the A300 to its fleet last year within six months of ordering the type. The airline does not currently carry out full repair and maintenance work on the 737s' JT8D engines, but it is taking steps to remedy this. A new JT8D hot-section inspection facility has just been brought into operation, and this is the first step in an expansion programme at the New Delhi 737 base which will lead to the FLIGHT International, 29 January 1983 261
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