Yes looks like my reading were right -

http://economictimes.indiatimes.com/articleshow/154595.cms

bmi flies out of India, Lufthansa trims flight
BYAS ANAND

TIMES NEWS NETWORK[ THURSDAY, OCTOBER 26, 2006 03:14:49 AM]
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NEW DELHI: The dropping yields and cut-throat competition in the Indian skies seems to be finally taking its toll. Even as passenger rush to India continues to cruise higher, the low returns on the sector is forcing international airlines to rethink — and even withdraw — some flights from India.

While Britain’s low-cost airline bmi has pulled out its daily flight to Mumbai, marking its exit from India, Lufthansa has decided to curtail one flight from Hyderabad. These come on the tails of similar decisions by JetStar Asia and Myanmar Airlines, which withdrew services from Kolkata and Delhi respectively.

Though the airlines blamed these on technical reasons and non-availability of aircraft, industry insiders said the cut-throat competition — which had led to a drastic slash in ticket prices and a resultant dip in yields — is to blame. “The fact remains that a lot of airlines today operating into India are not making money because of the high competition. This is just the beginning of a consolidation on some routes that had seen excess capacity,” said Ankur Bhatia, MD of Amadeus India.

But the pull-outs are not a cause for concern, said another industry analyst.

“A few withdrawals don’t mean that India has turned attractive as a destination,” said the analyst.

Lufthansa, for one, has decided to deploy its aircraft on the Germany-Kolkata route, while bmi is said to be utilising the aircraft to mount flights to the Middle East.

bmi — which was instrumental in bringing down India-London fares to Rs 16,000 levels — said the Mumbai service has been suspended indefinitely due to a “long-term” technical problem with one of the three Airbus A-330 aircraft. Incidentally, the launch of the Mumbai route was bmi’s first-ever long-haul service from Heathrow. The technical problem was a cracked wing main landing gear.

The airline’s CEO Nigel Turner indicated the uncertainty about the aircraft availability was impacting the airlines ability to confidently sell seats to Mumbai.