Air India to resume Dreamliner flights today

The airline would generate an additional revenue of over Rs 500 crore through slashing of staff costs.

New Delhi: Air India would resume domestic operations of grounded Dreamliners planes from Wednesday and their global flights from May 22 with the government on Tuesday saying the airline would cut costs to the tune of Rs 2,000 crore in the current financial year.

While monetisation of its assets in Delhi, Mumbai, Chennai and Coimbatore alone would generate additional funds Rs 1,000 crore, oil companies are expected to provide concessions of Rs 500 crore to Air India.

The airline would generate an additional revenue of over Rs 500 crore through slashing of staff costs, savings from interest on loans and working capital and booking agency commissions.

"The first commercial flight of the Dreamliner will start tomorrow from Delhi to Kolkata. Out of six of these Boeing 787 planes, two have been already modified following the battery fire incidents," Civil Aviation Minister Ajit Singh told reporters yesterday.

He said the first international flight of the Dreamliner would be launched from May 22. The national carrier would begin full-scale global operations with these planes from Delhi to Birmingham and Sydney-Melbourne from August, Rome and Milan from October and Moscow from early next year, the Minister said.

The remaining four of the total six Dreamliners with Air India now, would become operational by this month end, Singh said, adding another eight of these aircraft would be delivered by Boeing by December, taking the total to 14. The airline has ordered a total of 27 Dreamliners.

The B-787s have remained grounded since January 17 after a fire in the lithium-ion batteries of a parked plane in Boston and a case of forced landing of another B-787 for the same reason in Japan.

The Minister refused to divulge the amount of compensation the US aircraft manufacturer would give to Air India but said the airline has set up an internal committee to talk to Boeing on the issue.

The Minister had earlier said that the US aircraft manufacturer has agreed to compensate Air India for the battery problem. Boeing has since worked to develop new battery casings to prevent a repeat of the incidents of overheating of batteries providing auxiliary power.

Referring to financial projections for 2013-14, Singh said Air India's total revenue was expected to jump 20 per cent from Rs 16,130 crore to Rs 19,393 crore and its net loss declining from Rs 5,198 crore to Rs 3,989 crore.

Maintaining that the loss-making national carrier's performance has been improving consistently, he said its total revenue in 2012-13 improved by almost 10 per cent over the previous year -- from Rs 14,714 crore to Rs 16,130 crore.

"This is despite the strike by the pilots," he said, adding that the airline has improved its performance and was consistently meeting "most of the landmarks laid out in its Turnaround Plan."

Its net loss also came down by Rs 2,261 crore, while its EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) improved by Rs 2,256 crore in 2012-13, he said, adding Air India's passenger loads and on-time performance also recorded substantial improvement.

The Minister said the airline would evolve a functional model taking best practices of low-cost carriers while retaining the core services of a full-service carrier.

For this, the airline has started implementing recommendations of the Dholakia Committee on cost cutting to follow such a "hybrid model" to enhance revenues and cut costs, Singh said.

Regarding payment of salaries delayed for months, he said salaries have been paid till March this year to all employees, while the allowances to employees in 'licence' catergory-- pilots, engineers and cabin crew-- have been disbursed till January. A voluntary retirement scheme was also on the anvil.

On monetisation of assets, Singh said a decision has been taken to "immediately dispose of some unutilised properties". These are vacant plots in Delhi, Coimbatore, Chennai and Kolkata and some flats in Mumbai and Kolkata.

This would be done through a transparent process of e-auction and is expected to generate Rs 1,000 crore in 2013- 14, he said.


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