The Telegraph
Sunday , January 3 , 2010
Since 1st March, 1999
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Fresh AI bid to cut cost

Mumbai, Jan. 2: Air India is planning to outsource some of its functions such as information technology to cut cost.

“We may look at outsourcing. Everything need not be done in-house. This (outsourcing) is an option,” Air India chairman and managing director Arvind Jadhav told reporters here.

Air India has around 30,500 employees on its rolls and its annual salary expense amounts to Rs 3,100 crore. Salary payment is the second largest component in AI’s operating cost after the fuel bill.

The proposed move to outsource some of its functions will help the airline, which is suffering huge losses, to reduce its cost and is part of the ongoing turnaround plan.

Jadhav said the move would help the airline to concentrate more on its core business — aviation.

Fuel efficiency

Air India plans to save around Rs 800-900 crore annually after the implementation of the fuel efficiency programme that started in 2008.

The airline is currently implementing various initiatives to enhance its fuel efficiency in collaboration with the International Air Transport Association, the global body for airlines.

“We have saved Rs 146 crore on account of fuel savings programme, so far. By the time we get software (to facilitate better fuel management), we expect around Rs 800-900 crore in savings,” Jadhav said.

The fuel efficiency programme envisages changes in Air India’s operational techniques, equipment settings, use of fuel management, flight planning, engine maintenance and cabin weight management.

The airline is implementing certain fuel efficiency initiatives that do not require much technology.

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