AI eyes Dh720m savings to boost fuel efficiency

Air India is targeting to save approximately Rs900 crore (approximately Dh720 million), following the implementation of its fuel efficiency programme, according to a report published yesterday in India's business daily, The Economic Times.

Air India Chairman and Managing Director Arvind Jadhav, was quoted by ET as saying this: "We have already saved Rs146 crore on account of fuel savings programme up to October 2009. We expect around Rs800-900 crore savings by the time we get software to facilitate better fuel management by fiscal end."

The airline, which recorded losses to the tune of Rs5,500 crore in 2009-10, is currently implementing various initiates to enhance its fuel efficiency in association with global aviation trade body, International Air Transport Association (Iata).

Air India said it has improved its passenger load by more than 10 per cent, said the report, adding that the airline also reduced costs in 2009 by "deploying new aircraft and rationalising routes".

It is expected to return three more Boeing and 10 Airbus from its fleet.

The troubled Indian national carrier, which is in the process of restructuring its operations and cutting costs, has been granted Rs800 crore aid by the Indian government on the condition it continues to cut costs.

Air India has also shelved its plan to launch a separate brand for all-economy, no-frills service – such as a Jet Konnect – taking into account the changed market scenario over the last few months, ET reported.

It quoted Jadhav as saying: "We would have come out with a separate brand. But since we have the Air India Express [low-cost], we will expand under that brand rather than coming out with a Konnect kind of concept."

He said in the all-economy, no-frills service concept, fares are lower than what full service airlines offer but higher than low cost carriers. "The national air carrier was also looking at achieving savings from other segments such as hotel and transportation."

Meanwhile, in an effort to redeploy aircraft, the airline is planning to phase out 34 aircraft by March 2011 and induct nine aircraft during the same period – six Airbus A321s and three Boeing 777s, according to recent reports.

The airline is also looking at outsourcing its information technology business for manpower rationalisation. Air India reported recently its sales growth was 15 per cent quarter-on-quarter.

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