Air India: More international flights to raise cash, save costs
30 June 2011
Mumbai: Badly struggling Air India is looking at options to switch some of its domestic operations to international routes in a bid to increase revenues and save on costs. Fuel supplies are much cheaper abroad and airlines operating on international routes save on costs by tanking up their aircraft at foreign destinations.
Reportedly, the airline incurs losses of about Rs20 crore on a daily basis.
Airline officials say the carrier may switch about eight to ten services from the domestic sector to international routes in a bid to bring in some extra cash. Such emergency measures will be undertaken till such time as the newly-set up CoS (committee of secretaries) formulates ways to strengthen the airline's bottom-line.
Meanwhile, it's being given to understand that the carrier's bankers may be seeking government guarantees and other assurances before they commence fresh exposures for the carrier.
Bank officials say they want to know how the company intends making its operations viable. They said they were still in talks with the Reserve Bank of India (RBI) and the government on the issue of financial restructuring.
Though Air India's debt comprise both long-term and short-term loans, the short-term loans alone add up to Rs20,000 crore.