Air India takes cost cutting measures

Debt-ridden national carrier Air India has taken cost-cutting measures to reduce its financial burden and hike revenue inflows.

According to Minister of State for Civil Aviation Mahesh Sharma, the national carrier has been involved with route rationalisation for stopping operations on loss making routes.

Sharma informed the Rajya Sabha that Air India has been phasing out old fleet, which in turn will lead to reduced maintenance costs.

Other costing cutting measures the minister cited was closure of overseas offline offices and the introduction of a passenger service system for a single code.

"Plans to Operationalise subsidiary companies and transfer of manpower and equipment to these subsidiary companies," said the minister.

Air India is likely to incur losses up to Rs.5,000 crore in the previous financial year and has an accumulated debt burden of Rs.40,000 crore.

It received a fresh equity infusion of Rs.5,000 crore in the interim budget for 2014-15.

The cash-strapped carrier will be provided around Rs.20,000 crore till 2020-2021 to turn around its operational and financial performance.