Air India to restructure its fleet and network: fleet to be slashed by 25%

Air India, which expects to receive its first infusion of INR20 billion (USD430 million) from the Indian Government ahead of 31-Mar-2010, is entering the initial stages of its challenging restructure, targeted at the rationalisation of its fleet and route network to reduce its cost base and provide the carrier a more stable footing. As the carrier’s restructuring programme takes shape, these efforts are to be sustained and doubled by 2010 to turnaround the carrier financially. [1875 words]

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This report contains the following subheadings:

• To reduce annual losses from USD1.1 billion to USD282-390 million within 18 months
• Low cost Air India Express to operate up to 30% of capacity
• Will three new subsidiaries help turnaround operating loss margins above 20%?
• A rare case for IATA to support state funding for Air India
• Air India’s challenge to integrate and join Star by Dec-2010
• Tough challenges ahead

This report contains the following charts and tables:

• Air India operating profit/loss (INR millions): FY1997/98 to FY2008/09
• Indian domestic market share: Nov-2009
• Air India domestic passenger numbers and passenger numbers growth: Nov-2008 to Nov-2009
• Air India operating profit margin: 1997-98 to 2007-08