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Our Bureau

New Delhi, July 9 Air India, which is expecting to report net losses in excess of Rs 2,500 crore for the financial year 2008-09, is looking at a slew of cost-cutting measures, including going in for zero per cent commission for travel agents, implementing a package of International Air Transport Association (IATA) which will help cut down the annual fuel bill and by going in for sale and lease back of its aircraft.

A senior Government official told Business Line that the decision to cut commission will provide an annual relief of Rs 230 crore, while implementing the IATA fuel saving programme will lead to a saving of an additional Rs 300 crore.

Besides, the Government is also open to the idea of providing a bailout package for the airline which is expected to include capital equity infusion of Rs 1,300 crore and soft loans for Rs 1,000 crore.

“The national carrier has to be supported. We will have to pilot the proposal through the Finance Ministry, Cabinet Committee on Economic Affairs and the Cabinet before the package can be provided to the airlines. The exact contours of what type of financial help the airline requires are expected in the next two months when the proposal is firmed up by Air India and sent to the Government,” the official said.

The airline is examining a number of measures, including seeking an extension on doing the ground handling work at Kochi airport, apart from stopping some flights and cutting back on the frequency of other flights to reduce its losses. “The airline has also been asked to work on its marketing initiatives and ensure that the passenger load factors throughout the network improve,” officials said.

The airline is also to make a presentation to the Ministry of Civil Aviation next week on the steps being initiated to curtail the mounting losses.

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