Air India (AI, Delhi International) is looking to "substantially" trim its network of non-performing routes as New Delhi steps up pressure on loss-making parastatals to cut their deficits and turn a profit.

India's Business Standard newspaper says the national carrier is looking to reduce the number of non-performing routes in its network to 19% by the end of the current financial year having reduced the figure to 38% last year from 60% the year prior.

“We have completely withdrawn flights not meeting ATF (aviation turbine fuel) costs. While there would be flights in which we would not be able to generate operational profits, we are looking at meeting cash costs on 81 per cent of our network by the end of this financial year,” a senior airline official told the paper.

Of the 19 loss-making routes identified, six are international including Delhi International to Sydney Kingsford Smith and Milan Malpensa while the rest are domestic and include flights from Delhi to Bangalore International and from Mumbai International to Kolkata.

Chairman and Managing Director Rohit Nandan reportedly monitors route economics on a daily basis.

Meanwhile, Indian domestic airlines have voiced their collective opposition to a proposed draft policy that will see the country's larger scheduled carriers codesharing with smaller charter firms on regular flights to remote destinations.

The draft makes it mandatory for all scheduled airlines to deploy capacity on 87 identified destinations “which is at least equal to the capacity deployed on trunk routes” by October next year. Proposed destinations include cities and towns in Jammu and Kashmir, the Andaman & Nicobar Islands, Lakshadweep, Andhra Pradesh, Jharkhand and Maharashtra.

Among the incentives the draft proposes are exemption from landing and parking charges, Route Navigation Facility Charges, passenger service fee, fuel throughput charges and “any other charges levied by Airports Authority of India,” the draft said.

Non-scheduled operators would also have the option of converting to scheduled commuter airlines or air charter operators.

However, AINOnline says that airlines plan to suggest the establishment of a regional connectivity fund to help cover the cost of operating the routes. Under the plan's terms, every passenger would be charged a fee which would then be used to subsidize airline operations on flights to the 87 proposed destinations mentioned under the guidelines clause.

The Business Aviation Operators Association (BAOA) has also recommended that regulators change the current definition of non-scheduled operators to scheduled commuter airlines for those who propose to operate with an approved timetable.

Under India’s current Route Dispersal Guidelines, domestic airlines must deploy 10 percent of their operating capacity on flights to identified, underserved areas.