Air India focussing on cutting cost and increasing revenue

Cash-strapped Air India is focussing on cost reduction of Rs 1,500 crore and revenue enhancement of Rs 1,200 crore as per its turnaround plan and the government would infuse equity into the airline in the next few years, the Rajya Sabha was informed today.

"The airline's turnaround plan has been broadly divided into 0-9 months, 9-18 months and 18-36 months and has been segregated under operational efficiency, product improvement, organisation building and financial restructuring," Civil Aviation Minister Praful Patel said in a written reply.

He said the National Aviation Company of India (NACIL) was mainly focussing on cost reduction (to the tune of Rs 1,500 crore) and revenue enhancement (of Rs 1,200 crore).

The plan also envisages manpower cost rationalisation, fuel management, route profitability enhancement and non-traffic revenue enhancement.

He also said that Air India has rescheduled delivery of three Boeing 777-300ER aircraft beyond 2010 and 27 Boeing 787 aircraft beyond contracted delivery period commencing April, 2011.

The airline had also proposed to lease out three new Boeing 777-200LR aircraft.