In a desperate bid to stay afloat, bleeding national carrier Air India has chalked out an action plan that would help it save Rs 1,800 crore through cost-cutting and revenue-enhancing measures this fiscal.

The carrier is expected to post losses of well over Rs 4,000 crore this fiscal, which is double the unaudited Rs 2,144 crore net loss it had suffered in 2007-08. This would mean that Air India, which commands just a fifth of the total market share, would by itself account for half of the aviation industry’s projected losses of Rs 8,000-9,000 crore this fiscal. In 2006-07, the airline had reported losses of Rs 688 crore.

As initial measures to cushion its fall, Air India last week asked the government for immediate equity support of Rs 1,300 crore and a soft loan to the tune of Rs 1,000 crore. The demand was made during a meeting between Air India chairman and managing director Raghu Menon, civil aviation minister Praful Patel and other ministry officials. Air India’s paid-up capital is around Rs 150 crore, while its authorised capital stands at Rs 1,500 crore — a gap that would be bridged if equity were put in by the government.

Air India has also spelled out its action plan on cost-cutting measures to the civil aviation minister.

During the presentation to Patel, Air India said its load factors fell below 60 per cent for the first time in June this year. Of 207 pairs of flights, 50 per cent do not meet costs. Another nine flights incur cash losses. “At present, certain domestic flights on routes like Delhi-Bangalore are operating at a capacity of just 12-16 per cent. On the international sector, a Mumbai-Nairobi-Daresalam flight recently had just six passengers on board,” said sources.

... contd.