Air India aiming turnaround in three years

Air India aiming turnaround in three years

Flag carrier plans to cut costs to the tune of Rs 6,000 crore per year

Air India aiming turnaround in three years

Addressing the media, the national carrier’s CMD, Arvind Jadhav, said the airline had sought  equity infusion and a soft loan from the government and banks. He disclosed that the flag carrier was in talks with the banks and financial institutions to convert its Rs 10,000-11,000 crore high-cost debt into a low-cost one.

Asserting that AI had never used the tax payers’ money, Jadhav said the company’s earlier acquisitions were done through internal resources. “We have never written to the government for a bailout package. We have never talked of waiver of ATF charges, waiver of taxes, waiver of penalties. So, the question of AI running the show on tax payers’ money never arises.”

Admitting that AI has cash flow problems, he said the airline had presented its problems and requirements before the government and added that it was now waiting for the government to respond. The government had also been told that AI plans to cut costs to the tune of Rs 6,000 crore per year.

Restructuring plan
Air India has prepared a ‘draft restructuring plan’ which is divided into operational, business and financial restructuring in three phases of 0-9 months, 9-18 months and 18-36 moths. During this period, its aims will be for survival, loss reduction and profitable growth. The restructuring plan includes route restructuring, improved cargo revenue, launch of budget airline, cost reduction, IPO, etc.

Noting that “NACIL (National Aviation Company of India Limited — the holding company of AI) — has to change the way it does business”, Jadhav said his priority for the next six months would be on-time performance of its flights and seamless connectivity. He also said that there was 8 pc growth in passenger traffic in the last three months compared to the same period in the last three years.

Asked whether AI had lost out because foreign airlines got more flights through bilaterals with other countries, Jadhav said although AI operated 38,000 seats, it was using only 20 pc of its capacity at 64-69 pc seat occupancy, as only 25,000 seats are filled up. This still leaves 13,000 seats empty.”

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