This report is released by Press Information Bureau in December 2006

Since 1954, Air India has been operating Haj charter flights on Bombay-Jeddah-Bombay sector. Initially Air India had been using Boeing 707 aircraft. In 1979, in order to cope with the increasing demand of Haj pilgrims. Boeing 747 aircraft were deployed alongwith 707s. There has been steady escalation in the number of pilgrims being carried. In 1975, Air India had carried 1550 pilgrims whereas in 1988 Air India carried a total number of 20,114 pilgrims. Until 1982 Haj charters were operated only on Bombay-Jeddah-Bombay sector. From 1983, Delhi was also introduced in addition to Bombay as a second point in India . In 1987, Madras was also added to the list. In 1987, Air India also made arrangements with Indian Airlines to operate additional flights to accommodate pilgrims by air on the Srinagar-Delhi-Srinagar sector to connect at Delhi with international flights. Commencing from 1984, Saudia, the national carrier of Saudi Arabia, also started sharing Haj charter traffic on 50:50 basis with Air India.

It would be observed from the above that in the past, Haj pilgrims used to travel to Jeddah and back both by Ship and Air. Pursuant to a decision of the Cabinet the Haj sailings have been discontinued since 1995 and Haj movement started to take place by air. The pilgrims go to Jeddah for Haj either through Central Haj Committee (CHC) or on their own by commercial flights. It is only since 1993 that aircraft were chartered from international airlines to provide transport for Haj pilgrims. All pilgrims now travel to/from Jeddah by Air.

MEA is the administrative Ministry of Haj Affairs. The statutory responsibility of making arrangements for transporting Haj pilgrims by any mode including by air is of the Central Haj Committee (CHC).

Ministry of Civil Aviation/Air India was the nodal agency handing the movement of Indian pilgrims to/from Saudi Arabia upto 1995. Pursuance to a Cabinet decision dated 1st September 1995, the Central Haj Committee was made the nodal agency for the air charter negotiations for Haj 1996 operations. However, this experience was not happy. Accordingly, on 24.9.1996, the Cabinet restored the earlier procedure for Haj 1997 viz air charter negotiations be conducted, contract signed and implemented by Air India rather than CHC. Meaning Air India was made the nodal agency again. The Cabinet also decided that the representatives of Central Haj Committee, Ministry of External Affairs, Ministry of Civil Aviation and Director General of Civil Aviation should be associated with the air charter negotiations.

Accordingly, a procedure has evolved under which Air India makes arrangements for chartering aircraft for carrying Haj Committee pilgrims from various gateways points in India to Jeddah and back in consultation with the representatives of CHC, MEA & DGCA.

In May 2000, Supreme Court passed a Judgement that the Haj Committee shall function under the direct supervision and control of Foreign Secretary(FS) and none of its decision would be given effect to unless approved by FS himself.

In June 2002, the Parliament passed the Haj Committee Act, 2002 (No. 35 of 2002) to establish a Haj Committee of India and State Haj Committee for making arrangements for the pilgrimage of Muslims for Haj, and for matters connected therewith. As per Section 9(1) (iv) of this Act, the duties of Haj Committee include the duty to finalize the annual plan with the approval of the Central Government, and execute the plan, including the arrangements for travel by air or any other means, and to advise in matters relating to accommodations. Section 9(1) (vi) says the duty to co-ordinate with the Central Government, railways, airways and travel agencies for the purpose of securing traveling facilities for pilgrims.

The number of Haj pilgrims has gradually increased – 31,000 in 1995; 50,347 in 1996 to 63,648 in 1998. The pilgrims quota fixed by MEA remain at 72,000 during last five years. However, the quota for haj – 2005 has been increased from 72,000 to 82,000. Actual number of pilgrims carried by air during last five years is given below:-

Year No.of Pilgrims

2000 71924

2001 71215

2002 70298

2003 70019

2004 71945

2005 80786

2006 99926

Gradual Increase in haj subsidy

Fare charged for the Haj round trip and the subsidy given per passenger are as under:-
Hajj subsidy over the years

Increase in Charter cost and reasons thereof

Prior to 1993, the Haj operations were undertaken by AI/IA with their own aircraft. This resulted in cancellation of scheduled flights and loss of revenue and goodwill of airlines. Therefore from 1993 onwards (except 1997) the haj operations were undertaken with wet leased aircraft. Haj operations involve a heavy volume of traffic in a limited time period every year. It is not economical to have dedicated aircraft devoted only to haj operations. Aircraft is very costly equipment and its economic viability depends on its optimal utilization. Aircraft cannot be purchased and kept specifically for undertaking limited haj operations because of being expensive as compared to cost of chartering. In 1997 AI undertook haj operations with its own aircraft. This led to massive cancellation/reduction of its services, which was criticized in the media, parliament and industry and trade. Consequently, it was decided that in future the disruption of Air India’s scheduled flight should be avoided and Haj operations be undertaken with chartered aircraft.

In Haj operations, the aircraft that transport the passenger to Jeddah returns empty. Similarly, on the return journey from Jeddah, the passenger traffic is again one way. This doubles the cost of operation. Hence the charter operations became more expensive. The scheduled operators can afford to keep the fares by transporting the passengers on the aircraft both ways. Also the air service operations by scheduled airlines have a different fare structure from the haj operation costs since these are part of their larger network operations. Haj charter operations are specifically meant for this purpose and are a dedicated task undertaken only for this purpose.

Elements of cost of operations are as under:-

Cost of ACMI (Aircraft, Crew, Maintenance and Insurance) and fuel charged by charter operator for aircraft and its operating and cabin crew etc.
Other Operational Costs:-

This includes landing, handling, navigation, passenger insurance, catering on ground/on board, give away, staff hotel plus allowance, Royalty to Saudia, Cost of borrowing and cost of hub and spoke operations.

Other Hidden Cost of AI:

Several hidden costs not recovered by Air India from Government or Haj Committee relate to the working of various officers round the year basis only on haj matters and expenses incurred on them and on the correspondence and floating of global tender by Air India.

Cost since 2001:

Since 2001, the Haj operations are being undertaken by Air India & Indian Airlines in association with Saudi Arabian Airlines (SAA). Since SAA have been participating in the Haj operations and carrying a large number of pilgrims from India to Jeddah and back (from 4 embarkation points), @ USD 700 per pilgrims for the last 2-3 years, bids were not called for chartering of aircrafts for Haj operations. As SAA charges USD 700 as fare and USD 10 as insurance surcharge for each return seat, Air India is also charging the same but they are being paid US$ 770 per pilgrims for farther stations like Chennai and Kolkata apart from US $ 770 per pilgrim for Insurance Surcharge. Air India is also being paid additional cost on actual basis for the pilgrims from Srinagar and Lucknow.

6.Recommendations for progressive reduction and eventual elimination of haj subsidy.

Recommendation of Standing for External Affairs:- The Government should progressively reduce and eventually eliminate subsidy on their transportation to and from India.

Recommendation of Parliamentary Standing Committee on Transport and Tourism:- The committee feels that it is huge amount and it should be withdrawn in phases.

Recommendation of Expenditure Reforms Commission (10th Report):- Pending finalization of the modalities of phasing out subsidy, action should be taken to freeze the subsidy at present level, by limiting a number of persons to be covered as also the subsidy on the charter fares at the present level.

7. Government decision about Haj 2004

In view of the aforesaid recommendations, the Ministry of Civil Aviation has been making proposal for phased reduction of haj subsidy. In its meeting held on 11th Sept. 2003, the following proposals were approved by the Government:-

The subsidized Haj fare to be permitted for each pilgrim only once in his/her life time from Haj 2004 onwards;

No Income Tax payers is allowed to avail of the subsidized far from Haj 2004 onwards. Only those pilgrims who live in the accommodation provided by Haj Committee would be eligible for the subsidized fare.

The subsidized fare would be kept at the existing level of Rs. 12,000 for Haj 2004 and the subsidy may be reduced in a phased manner in subsequent years.

Cabinet has also directed that an affidavit be obtained from the pilgrims to the effect that they have not availed the subsidized Haj fare earlier and that they are not income tax payee.

A large number of representations were received by the Government to withdraw the revised guidelines. Haj Committee also requested in its letter dated 9.10.2003 addressed to MEA, to defer the implementation of the part of the Government’s decision relating to exclusion of Income Tax payers, persons performing haj through CHC second time and pilgrims availing exemptions from reserved accommodation Scheme from the benefit of subsidized air fare. The Government considered the above matter and decided that the same could not be agreed to.

8.Government decisions about Haj-2005

However, in its meeting held on 20th October, 2004, the following decisions have been taken by the Government:-

(i) To retain the amount of Rs. 12,000 to be paid by each pilgrim for the round trip to Jeddah/Madinah and the remaining cost as subsidy to be paid by Government to Airlines.

(ii) To add Guwahati and Aurangabad as new embarkation points for Haj 2005 and Patna will be an embarkation point in place of Gaya.

(iii) In the current year, all persons who applied for Haj travel – about 82,000 will be provided the facility; and

(iv) Policy prevailing prior to September 2003 will be followed. However, non-income tax payees will get higher priority for availing such facilities.

Saudi Arabian Airlines, Air India and Indian Airlines transported 80,786 pilgrims to Jeddah. There were 15 embarkation points in India from where these pilgrims were uplifted to Jeddah and carried back to same stations and these are Ahmedabad, Chennai, Delhi, Hyderabad, Kozhikode, Mumbai, Bangalore, Kolkata, Nagpur, Jaipur, Lucknow, Srinagar, Aurangabad, Guwahati and Patna. Aurangabad and Guwahati were added as new embarkation points for Haj 2005. The total subsidy for Haj 2005 comes around to Rs. 165.77 crores approximately.
Haj 2006 Operations

The Government on 11.8.05 decided that the number of persons performing Haj through the arrangements made by the Haj Committee under the Government subsidy scheme be increased from 82,000 to 1,00,000.

The Government on 16.11.06 approved the travel of 110,000 pilgrims under government subsidy scheme for performing Haj during the Haj 2006-II. This is an increase by 10,000 pilgrims from Haj 2006.

The government also decided to retain the fare of Rs 12,000 to be paid by each pilgrim for the round trip to Jeddah/Medina and the remaining cost to be paid by the government as subsidy to the airlines transporting the pilgrims.

No fresh embarkation points have been added to the existing 15 points in India from where pilgrims are taken to Jeddah and brought back. Haj 2006-II is due to commence towards end of November 2006.

Up to 60,000 pilgrims will be transported by Saudi Arabian Airways from Mumbai, Delhi, Ahmedabad and Hyderabad, and the balance by Air India/Indian Airlines from Kolkata, Calicut, Nagpur, Aurangabad, Patna, Guwahati, Jaipur and Srinagar.

There has been a steady increase in the number of Haj pilgrims – 71924 in the year 2000 to 99926 in 2006. However the fare paid by each pilgrim has remained Rs. 12000 since 1994. While the subsidy per passenger in 1994 was Rs.5000, it went up to approximately Rs.28000 in 2006.

Traditionally, Haj pilgrims used to travel only by ship and the transport arrangements were coordinated by Shipping Corporation of India and the subsidy was paid from the Budget of the Ministry of Surface Transport.