Having come under sharp criticism from the civil aviation ministry to get its act together, Air India is now set to trim excess capacity through a route rationalisation plan that will help it save Rs 1,000 crore every year, highly placed sources in the ministry of civil aviation said. The plan would include rationalisation of services on certain metro routes that have a surfeit of capacity, and removal of certain loss making routes. The national carrier is expected to save around Rs 500-600 crore this fiscal once the rationalisation plan comes into force next month. “The national carrier will start these cost saving measures next month and is at present planning the implementation,” the official said.

On the matter of equity infusion and soft loans needed by the carrier to combat operating losses and other expenses, the official said senior Air India officials were working closely with the ministry of civil aviation on the proposal, “We are working on the proposal with Air India and should be ready with it in another 10-15 days,” he said. The official also said that a fresh order of aircraft for the national carrier was “off the radar”.