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IA draws flight path for Alliance Air

Byas Anand

[ Thursday, February 23, 2006 ]

NEW DELHI: With its four-year-old plane purchase plan finally taking off, the state-owned Indian Airlines is now trying to firm up the future roadmap for its feeder airline subsidiary Alliance Air.

The airline top brass is preparing a "base paper", which would determine whether the airline has to be operated as a low-cost arm or has to be closed down.

"The paper will be ready in a month's time," Indian Airlines' newly appointed chairman and MD Vishwapati Trivedi said.

"The paper will then be forwarded to the government to seek their views on the future course of Alliance Air. We will suggest the options of either running the airline more efficiently or closing it down. The final decision on the fate of Alliance will be determined only after an approval from the government," Trivedi said.

The review, he said, has been initiated to determine the future of Alliance Air in the wake of the growing competition in the market.

The various options being considered include restricting its operations to small routes or developing it as a low-cost no-frills airline. "We will look at all options, including closing down the subsidiary if the need be. While closing down the airline could be one of the options, we are not too keen on it," he added.

Indian Airlines had set up Alliance Air as a wholly-owned subsidiary in 1983 with the objective of providing support services to its core activities. However, the arm had later started operating air services using the Boeing 737 aircraft. This airline is today also responsible for ATR turbo-prop operations in northeast India.

"While determining the future of Alliance, we also have to keep in mind the commitments to northeast," Trivedi said.

The fortunes of the airline had started dipping a few years back and it had reported a provisional loss of Rs 34.43 crore during April-November 2004, as against a loss of Rs 29.14 crore reported during the same period a year earlier.