AI to operationalise 3 strategic business units by April this yr

The National Aviation Company of India Limited (NACIL) that runs state-owned carrier Air India will operationalise three strategic business units (SBUs) by April 2010. The units will focus on the areas of engineering,ground handling and cargo operations and are expected to be hived off as separate subsidiaries of the carrier with separate balance sheets. Also,roughly 16,000 AI employees who are already a part of these separate departments currently are expected to be shifted to the new subsidiaries,which will dramatically bring down Air Indias employees per aircraft ratio that currently stands at 276 per aircraft and is among the highest in the industry.

The carrier has entered into a strategic alliance for marketing its engine overhaul facility with Sharjah-based Aerostar Asset Management. The alliance has created an Engine MRO brand called The A Team that has started providing engine repair and management solutions to all airline operators of the Gulf region to begin with. The A Team will utilise the existing engine overhaul facilities of Air India at Mumbai and marketing set-up of Aerostar in the Middle East, the airline announced in a release.

The airline also expects overall savings to the tune of Rs 1,400 crore this fiscal through cost rationalisation in various areas. The carrier managed to save about Rs 550 crore in the last three months under specific heads like fuel consumption,operational restructuring and maintenance. On fuel,Air Indias CMD Arvind Jadhav, said that the carrier had already saved Rs 146 crore till October 2009 and expects to save about Rs 800-900 crore in the next year.

Deployment of new Boeing B777s has resulted in substantial reduction of cost of operation as these aircraft are more fuel efficient. The carrier is also deploying more Airbus A321s and 319s to replace the old A320s, said Jadhav while briefing the media on Air Indias achievements in the past one year. The carrier added a total of 29 aircraft to its fleet including seven B777s,eight A321s,nine A319s and five Boeing 737-800s for its low cost carrier,Air India Express. It also phased out 11 aircraft in 2009 and expects to withdraw 13 more by March 2010.