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Air India to double its restructuring efforts by 2020 to ensure financial turnaround

5-Jan-2010 8:08 AM

Air India stated (04-Jan-2010) it faced and continues to face challenges to take the airline forward. The carrier made the following announcements regarding its turnaround plan:

  • Operational restructuring: Network restructuring and route rationalisation, elimination of positioning legs from base stations to another city for operating international flights and rationalisation of aircraft deployment, which are expected to generate net benefits of:
    • USD81.7 million during Winter Programme 2009/10;
    • USD121.6 million for the full year;
  • Fleet: Induction of 29 new aircraft in 2009 and enhanced utilisation of fleet has helped to phase out 11 old aircraft. By Mar-2010, three additional B777-200s, two A310s and eight A320s will be returned/retired from the carrier’s fleet.
  • Passenger traffic: Passenger numbers increased 10.1% year-on-year from Apr-2009 to Nov-2009;
  • Fuel efficiency programme: Achieved savings of USD31.5 million up to Oct-2009;
  • Other cost reduction areas included hotel accommodation, ground transportation, foreign and domestic travels and tours, reduction of over-time and work-through-break, and other controllable areas;
  • Merger of Air India with Indian Airlines: In India and abroad, Air India has combined the booking offices of the former Air India and Indian Airlines to save on establishment costs. Similarly, the office at the Jeevan Bharti Building in New Delhi has been surrendered resulting in a savings of approximately USD1.1 million p/a;
  • 2020 target: Efforts are to be sustained and doubled by 2020 in order to turnaround the airline financially. [more]