Air India tightens belt to save Rs 1000 cr a year

Mumbai: Down with a loss of Rs 1,200 crore, which may go up to Rs 3,500 crore this year, National Aviation Company of India (NACIL), which operates Air India, has been putting a belt-tightening measure in place to save at least Rs 1,000 crore a year.
The measures, effective this month onwards, include deferring expansion till year-end, offering sabbatical to staff and cancellation of non-profitable domestic routes.
“We plan to shelve the non-profitable domestic routes. We will kick off fresh expansions only in the mid 2009. These, combined with other measures, would lead to saving of Rs 1,000 crore a year,” an Air India executive told ET.
Air Indian executive director for corporate communications Jitendra Bhargava said: “We have formed a committee, which focus on initiatives in areas like maintenance and engineering, commercial and training. The steering committee and sub-committee will implement the initiatives in a time-bound manner to save costs across all segment of our business.”
On the employee front, sabbaticals are being offered for two to five years to its employees to reduce the annual wage bill.
Air India is also taking long-term measures to improve fuel efficiency. For this, it has decided to induct two new fuel-efficient aircraft every month to replace the older aircraft. This is aimed at reducing expenditure on aviation turbine fuel (ATF), which contributes to over 45% of its operating costs.
Air India is also banking on increase in load factors as domestic and non resident Indian (NRIs) will travel to their home towns in the festive season.
04/10/08 Mithun Roy/Economic Times

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Categories: NACIL Oct 2008