The Air India board met here on Tuesday and decided to initiate a series of major steps to cut costs and enhance savings as it gets ready to receive the first tranche of Government’s equity infusion worth Rs. 800 crore.
The board reviewed the progress being made by the national carrier in implementing a series of cost-reduction measures as part of a monthly review, official sources said, adding the board is likely to take “major decisions” when it meets on January 8 and 9.
Air India, which recorded a loss of Rs. 5,548 crore in 2008-09 compared to Rs. 2,226.16 crore in 2007-08, is focusing on cutting costs by Rs. 1,500 crore and increasing revenues by Rs. 1,200 crore as per its turnaround plan.
The Parliament had earlier this month approved the Government’s proposal to extend Rs. 800 crore to the ailing National Aviation Company of India (NACIL) which operates the troubled Maharaja.
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.
Apart from manpower cost rationalisation, other plans to reduce costs include better fuel management, enhancing route profitability and non-traffic revenue enhancement.