Eva Air third airline to suspend Indian operations

May 15th, 2008 - 12:52 pm ICT by admin  

A file-photo of Thai Airways
By Varada Bhat
Mumbai, May 15 (IANS) Rising fuel costs coupled with the choice of destinations have forced Taiwan-based Eva Air to pull out of India, making it the third international carrier in a year to stop operations here. “We have decided to temporarily suspend operations to India with effect from June 1. We will evaluate the re-opening of India operations once profitability conditions are reinstated,” Eva Air general manager (India) Eric Chiang told IANS.

Italian carrier Alitalia, run by Linee Aeree Italiane S.p.A, and Britain’s second largest airline British Midland Airways or BMI, have already shut down its India operations due to poor passenger response.

Eva Air operates flights between Mumbai and Taipei thrice a week and also offers the cheapest fare on the Mumbai-Sans Francisco route with a stopover at Taipei.

It has special pro-rate agreements with Singapore Airlines, Malaysia Airlines, Air India, Jet and Thai Airways to Southeast Asian destinations, from where they can pick up passengers from India and connect them to the west coast of the US.

A Mumbai airport official familiar with the development said: “Airlines pull out from services when they make losses. Though there are problems pertaining to high fuel cost and sourcing aircraft, Eva was already suffering from losses on this sector.”

Eva’s exit comes at a time when Indian carriers like state-owned Air India and leading private airline Jet Airways are aggressively expanding their international operations especially to Southeast Asian and US destinations and Kingfisher Airlines is also planning to fly to the Bay area by August.

According to the apex air transport monitoring body International Air Transport Association (IATA), in 2006-07 airlines operating out of India carried 22.4 million international passengers, with an increase of over 15 percent over the previous year.

The Centre for Asia Pacific Aviation, an aviation consultancy, predicted that international traffic to and from India would grow at this rate till 2010.

Aniket Mhatre, an analyst with brokerage firm Prabhudas Liladhar, said Eva Air’s withdrawal from India is due to the problems the airline faced.

“The profitability of an international carrier is solely dependent on the routes undertaken by them. The increase in the price of aviation turbine fuel (ATF) is leading to the rise in fares. As a result, there is a dip in the load factor,” he said.

Mhatre said the only alternative for airlines now is to restructure their business models and fly on routes which are full to capacity.

Jet Airways CEO Wolgang Prock-Schauer said the Eva exit will not dampen the market dynamics much, as several flights continue to fly on these Southeast Asian routes.

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