Air India shifts international hub to Delhi IGI's T3

New Delhi: Flag carrier Air India has decided to make Delhi airport's brand new Terminal 3 (T3) its international hub, shifting base from Mumbai. The deal is expected to help the struggling carrier reduce overall costs by almost a third. The deal was struck with the GMR-led consortium that runs Delhi International Airport Ltd's (DIAL) Indira Gandhi International Airport.

 ''Making T3 our hub is a business strategy on the part of both partners,'' said a senior Air India official. Though the discount level was not disclosed there are suggestions that it may be as high as 30 per cent.

Consequently, Air India expects its partnership with DIAL to help it increase revenues by 9-12% in a year, AI officials have indicated.

Airlines are charged by airports for takeoffs, landing, parking, use of aerobridges and terminal facilities.  The savings affected by designating an airport as its hub is vital for any airline as it gains hugely by discounts that airports offer.

Airports, in turn, gain hugely in such a transaction as airlines bring in large number of passengers, utilise larger number of flying and parking slots etc., when they designate an airport as a hub.

The gains are mutual.

Loss-making Air India is expected to post a loss of about Rs5,400 crore on revenues of around Rs 15,000 crore for fiscal 2009-10.

Air India's move to Delhi's T3 will result in the creation of India's first hub. It is expected that the carrier will get 16-18 aerobridges and 56 exclusive check-in counters at T3 because of the deal.