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Air-India traffic down 5-8 per cent since attack: Hussain

National flag-carrier Air-India's passenger traffic has dropped 5-8 per cent since the September 11 suicide skyjackings in the United States, Civil Aviation Minister Syed Shahnawaz Hussain said on Tuesday.

In brief remarks after inspecting tightened security arrangements at Air-India's headquarters in Bombay, Hussain also said the sale of a controlling stake in the state-run carrier will proceed, though at an uncertain pace.

"You must ask the Tatas," the minister said when asked about the sale process, which ground to a halt last month after Singapore Airlines withdrew from a bidding consortium with the Tatas, one of India's largest industrial groups.

Singapore Airlines said on September 1 it was pulling out of the only consortium left in the running for a 40 per cent stake in Air-India, which has a small fleet of 27 aircraft, lost money the past six years and is saddled with Rs 3.3 billion in debt.

In a move aimed at helping Air-India reduce that debt and improve its appeal to foreign buyers, Hussain said the airline would receive the proceeds from the sale of Hotel Corporation of India Ltd, which the government plans to sell off in November.

The wholly-owned subsidiary of Air-India operates four five-star hotels located in major travel destinations in India, and a smaller fifth hotel in Bihar.

It also operates two flight kitchens -- one in Bombay capable of preparing 10,000 meals a day and another in Delhi with an 8,000 meal-a-day capacity.

Recent news reports said the ministry of civil aviation had convinced the finance ministry that the sale proceeds should go to Air-India, rather than to the central government as the finance ministry originally wanted.

Estimates of the amount to be raised by selling HCI, which operates the Centaur hotel chain, vary from Rs 5 billion to twice that much. Hussain declined to offer an estimate, saying setting a reserve price was the responsibility of the ministry of divestment.

The minister said the US and Japan routes accounted for most of the decline in passengers since the attacks last month on the World Trade Center and the Pentagon.

Air-India has since reduced its number of US-bound flights by 20 per cent -- to eight times weekly from 10. The US service accounted for 18 per cent of revenue last year.

Air-India has maintained the same number of flights to Japan at five a week.

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