Measures to establish Air India as The Most Preferred Airlines


The Air India Limited has improved its performance in the FY 2014-15 as compared to the previous year. There have also been improvements in passenger revenue and cargo revenue earnings as compared to the previous year. In view of the losses suffered by Air India up to 2010-11 and its mounting debt burden, Government had approved a Turnaround Plan (TAP) / Financial Restructuring Plan (FRP) for operational and financial turnaround of Air India. The TAP/FRP provides equity infusion of Rs.30231 crores upto 2021 subject to achievement of certain milestones as laid down in the TAP/FRP.

The Company has achieved the targets set out in the TAP milestones, and has made substantial progress in both operational as well as financial areas. As a part of the Turnaround Strategy for Air India Ltd., the company with the overall support of the Govt. has initiated a number of steps in order to cut costs and losses. These steps, inter-alia, include the following:

i. Route rationalization of erstwhile AI & IA route and elimination of route network involving parallel operations.

ii. Rationalization of certain loss making routes.

iii. Phasing out of old fleet and consequential reduction in maintenance cost.

iv. Joining of Star Alliance.

v. Enhanced utilization of new fleet resulting in production of higher Available Seat Kilometers (ASKMs).

vi. Closure of overseas offline offices at certain locations.

vii. Introduction of PSS (Passenger Service System) to have single code and SAP ERP based solutions throughout the organization in terms of increase in revenue and decrease in cost.

viii. Upgradation of IT infrastructure and implementation of Quick Win IT solution.

These steps have enabled Air India Ltd. to earn, an operating profit of Rs 105.00 crore in 2015-16 as compared to the operating loss of Rs 2636.18 crore in the previous year.Net loss has also reduced from Rs 5859.91 crore in 2014-15 to Rs 3836.78 crore in 2015-16, thereby reducing the net loss by 34.5 %.

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