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Air India announces details of financial and organisational restructuring

20-Nov-2009 8:48 AM

India's Minister of Civil Aviation, Praful Patel, informed (19-Nov-2009) the Lok Sabha that National Aviation Company of India Limited (NACIL) has taken the following turnaround initiatives, mainly focused on cost reduction (target of USD320.9 million) and revenue enhancement (target of USD256.7 million). Details include:

  • Cost Reduction:
    • Rationalisation of domestic and international loss making routes (see below);
    • Rationalisation of catering at domestic and foreign stations;
    • Reduction of contractual employment and outsourcing, closure of selected offices;
    • Rationalisation of wage agreements including productivity linked incentives (PLI) scheme;
    • Return of aircraft on lease;
    • Fuel efficiency enhancement study, appointing IATA to make recommendations;
  • Revenue Enhancement:
    • Increase in passenger revenue through improved marketing, new onboard revenue initiatives;
    • Increase in cargo revenue through better utilisation of belly space on both passenger and cargo services;
    • Increase in excess baggage revenue;
    • Engine MRO/line maintenance established as separate strategic business unit, increasing utilisation of capacity and labour;
    • Alternative use of properties;
    • Provision of aviation training services.
  • Review of network strategy: