Air India has announced a series of cost-cutting measures which include plans to cut reimbursables by 10 per cent and abolition of posts from the non-operational areas.

The national carrier has also decided to discontinue loss-making routes to rein in spending and return to break-even. The use of expensive hotels or five-star hotels for stay during the travel or holding events has been restricted unless it is unavoidable and the budget for such activities has been reduced by 10 per cent as part of the measures, Air India sources said.

“These cost-cutting measures are part of a two-pronged drive to speed up our return to the break-even status. The measures are aimed at cutting costs under all controllable account heads by nearly 10 per cent,” they said.

After a long spell of losses, Air India had recorded a net profit of ₹14.6 crore in December last on account of a healthy growth in both passengers and cargo revenues.

Air India’s total revenue rose 6.5 per cent to ₹2,070 crore during December 2014 compared with ₹1,944 crore in the same period in 2013.

The airline has reduced both its operational and net loss over the last two fiscals. Its net loss came down to ₹5,389 crore in the last fiscal compared with ₹5,490 crore in financial year 2013 and ₹7,559.74 crore in FY12.

“With the decline in fuel prices, the company plans to achieve at least a 20-25 per cent reduction in its fuel bills in the next fiscal,” the sources said.

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