Melbourne wins air india service

In a diplomatic and economic coup for Victoria, India's national airline will introduce daily direct flights between Delhi and Melbourne...

Victoria beat New South Wales in a bidding war for the new Air India service, which will start operating from Melbourne Airport on November 1.

Yesterday's announcement comes after months of tension between India and Australia over violent and allegedly racist attacks on Indians in Melbourne, and intensive efforts by the federal and state governments to rebuild relations.

Premier John Brumby - who visited India in September on a mission to rescue Victoria's good name as a destination for foreign students and tourists - last night hailed the airline deal as the start of a new era of mutually beneficial cultural and personal exchanges between the two nations.

''The two economic giants of the 21st century are China and India, and to get in early with this historic arrangement with India's national carrier will be great for our state,'' Mr Brumby told The Age.

''For everything that's been written and said in the media [about the attacks on Indians in Victoria], the underlying relationship is very, very strong.'' He said the arrest last week of two youths over the murder of accounting graduate Nitin Garg, who was fatally stabbed on his way to work at the Yarraville Hungry Jack's in January, was a key development.

''It's brought some closure, and a much higher degree of confidence now by the Indian government in Victoria Police and our justice system,'' Mr Brumby said.

He confirmed the state government had spent a ''modest'' amount of public money to lure Air India to Melbourne.

Under the deal, the airline will establish its regional headquarters in Melbourne, creating about 80 jobs, and the Victorian government will contribute to the cost of an advertising campaign in India.

''They obviously need to get backsides on seats,'' Mr Brumby said.

''It's good for us because we get the tourists, and it's good for Air India because they get the volume and can offer more competitive fares.''

The deal is the culmination of a concerted campaign by the state government to reassure Indians they will be safe and welcome in Victoria.

Mr Brumby met India's Minister for Overseas Indian Affairs, Vayalar Ravi, in Melbourne last week, and the Minister for Human Resource Development, Kapil Sibal, in April.

Victorian Industry and Trade Minister Jacinta Allan, who visited India late last year, used yesterday's announcement to take a swipe at Sydney Airport.

Ms Allan said Air India's decision underscored Melbourne Airport's competitive advantages over its interstate counterparts. ''Melbourne Airport is Australia's major around-the-clock, curfew-free international airport, accommodating international carriers at about half the operating costs incurred at Sydney,'' she said.

Qantas, with India's Jet Airways, has daily flights from Delhi via Singapore.

Source: www.theage.com.au