Cut-throat competition in the India-UK route has taken its toll on the UK's second largest full service scheduled airline bmi (British Midland).
The airliner, which was initially planning to strengthen its network in India, has indefinitely suspended its daily service to London Heathrow from Mumbai.
A member of Star Alliance, bmi had deployed Airbus A330 aircraft in this route.
A bmi executive confirmed the development. "We have taken necessary arrangements for accommodating passengers in other airlines operating in this route," the official said.
Sources said the increasing competition and pressures on the margin have forced the airline to withdraw its services from one of the profitable international route from India.
Jet Airways, Air-India, British Airways and Virgin Atlantic are the leading airlines operating direct flights to the UK destinations.
"The A330 aircraft deployed in this route had reported a major technical problem in its landing gear, which was first in the history of Airbus," the bmi executive said.
Sources in bmi airline pointed out that there was no spare aircraft and efforts to lease an aircraft did not work out.
"Moreover, we have more expensive network in the UK and Europe, apart from long-haul routes in the Caribbean routes. So it was impossible to replace an aircraft from those routes," the source said.
The suspension, however, has an immediate and positive impact on Jet Airways.
A Jet Airways executive said the load factor in the India-UK flights, that was hovering around 65 per cent, has increased to 85 per cent following the exit of bmi.
A study by the UK-based independent specialist aviation regulator Civil Aviation Authority (CAA) said the number of people travelling directly between the UK and India had doubled from just over one million in 2004 to over two million for the twelve months up to July 2006.
"This is due to the greater choice and capacity available, combined with cheaper fares. Between October 2004 and October 2006, the number of direct services between India and the UK more than tripled from 34 to 112 services per week. A combination of factors such as pre-existing carriers offering more flights and arrival of new carriers in the market has been the reason," CAA study said.
Chief Executive Officer Nigel Turner, during his last visit to the country, had said: "India is a crucial market for bmi and we want to fly the maximum number of flights to this country. Currently, we have a modest market share in the India-UK route and we will be actively considering more cities in India. However, Mumbai will be our focus."
CAA, in its observation on increasing competition in the India-UK route, said the only group to have been negatively affected were those airlines already serving India from the UK, either directly or indirectly, where previously lucrative profit levels have been reduced as a result of the enhanced competition in the market.
Harry Bush, group director - economic regulation, CAA, said, "We see more competition, lower fares and greater route choice driving growth in trade and tourism, helping strengthen the already close ties between the UK and India."