Air India (AI) was made to withdraw services from “lucrative and profit earning routes” in the name of “route rationalisation” while being forced to operate flights on loss making routes, said a Parliament Standing Committee report, which details how private airlines gained at the cost of the flagship carrier.
“Private players were favoured in the route dispersal guidelines,” the committee, chaired by Sitaram Yechury and consisting of 31 members of Parliament, noted last year.
“Indian Airlines was denied a level-playing field. Private operators were permitted to operate on routes of their choice. IA was forced to keep a network operational, which involved more than 70% routes that were loss making,” it said.
“In the Mumbai-Dubai sector, AI services were reduced from three to two flights daily but their competitor was able to operate four services daily. If the decision was based purely on commercial prudence, then how come the competitor could operate four services daily?” it questioned.
“Services from lucrative Mumbai-Doha sector, which got 90% occupancy were withdrawn abruptly and the vacuum was filled by a private operator,” the report said.
“The committee apprehends that there appears to be a nexus operating for surrendering lucrative routes to favour the private operators. An inquiry be constituted to analyse the withdrawal of lucrative routes to favour the private players. The inquiries are necessitated by the fact that immediately on withdrawal of services by AI the private operators introduced their flights in the same sector,” it noted.