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19-May-2010 10:05 AM

Air India targets USD439 million in cost reduction and USD285 million increase in revenue

Air India parent, National Aviation Company of India Ltd (NACIL), announced the Board of Directors are scheduled to meet with the Ministry of Finance on 19-May-2010 to discuss the carrier’s turnaround plan (The Economic Times, 18-May-2010). The carrier is targeting a USD439 million reduction in costs p/a. The Board also informed that a 15% reduction in employee costs would result in cost savings USD110 million p/a. The carrier plans to increase revenue by USD285 million p/a and increase load factor above 80%. Load factors on the domestic and international networks are averaging 72% and 69%, respectively. NACIL also plans to increase operational hours of new Boeing and Airbus deliveries to 14 and ten hours per day, respectively.