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Debt-ridden Air India to vacate unused space to cut costs

Aiming to cut costs in view of the massive debts of more than Rs 50,000 crore, Air India is planning to vacate unused space at certain airports. The move will allow the airline to save on rentals. The plans were announced by Air India CMD Rajiv Bansal. This is among the several other measures that the airline has taken in recent times to cut costs. Air India is scheduled for disinvestment, but its massive debt is creating challenges for potential buyers. After taking charge, Bansal has been trying to improve the airline’s on-time performance (OTP) and customer service and reduce costs. The airline has also planned to sell scrap so that space can be created and vacated to save on rentals.

Selling the scrap will also allow the airline to earn some extra bucks. Bansal said that space can be vacated at both Delhi and Mumbai airports. The space at airports is usually meant for carrying out maintenance activities on aircrafts. Air India currently has around 10 hangars at various airports in the country. It has 142 aircrafts and it flies to 70 domestic and 42 international destinations. Bansal said that he has deployed a 2-pronged strategy wherein some measures are designed to increase revenue whereas other measures will help the airline to cut costs. Bansal said that the airline is currently facing problems with its debt service obligations due to the huge debt.

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