State-owned carrier Air India is to cuts its costs by 14 billion rupees ($227 million), or about 6% of its total outlays, in the next financial year after the government asked the loss-making airline to improve its finances.

Air India, which controls close to a fifth of India's domestic air travel market, has been losing money for years and has long been criticised for its high costs. In 2012, the government handed the company a $5.8 billion bailout package.

Air India kicked off a virulent fare war across the domestic network on Monday, cutting economy class fares up to half compared to Saturday’s rates, undercutting both low-cost and full-service carriers.

The move comes a few days after Vistara launched services in India, between three cities to begin with.

The government-owned, loss-making Air India is once again facing attrition as 33 pilots have left the airline this year.

Some of them deserted the national carrier and joined other airlines without even tendering their resignations, notwithstanding the strict rules on bond liabilities.

A threat of a bomb explosion or a possible suicide attack on an Air India flight from Mumbai sparked an alert here with authorities beefing up security at the international airport.

Airport Director A K C Nair said that they received information from Kolkata that there is a threat to the Air India flight on the Mumbai-Kochi sector on October 25 and Ahmedabad-Mumbai sector tonight.

NEW DELHI: A non-existent scam is proving to be the latest flashpoint between Air India management and its pilots.

The AI management Tuesday issued notice to the airline's pilots' union over "misrepresenting facts and spreading malicious" rumours. The Indian Commercial Pilots' Association (ICPA, union of erstwhile Indian Airlines' pilots) had alleged that six grounded-for-years Boeing 737 (freighter) were "being insured at $1 million each".

Mumbai: State-run Air India Ltd, which has a debt of Rs.40,000 crore, has struck a deal with German lender Deutsche Bank AG and the UK’s Investec Bank for selling and leasing back five Boeing B787 Dreamliner planes in a $600 million deal.

According to two Air India executives, who asked not to be identified, Deutsche Bank will buy four planes while Investec will buy one.

State-owned Air India (AI) aims to substantially cut the number of routes not meeting variable costs, to reduce these to 19 per cent of its overall network by the end of the current financial year.

The carrier, which operates about 480 daily flights in the international and domestic sectors, had brought down the number of routes not meeting variable costs to 38 per cent of its network by the end of 2013-14, from 60 per cent.

As part of its personnel rationalisation drive, Air India is considering redeploying about 10 per cent of its employees to various departments in the ministry of civil aviation. Currently, the airline has about 13,000 employees. Of this, 1,500-1,600 are likely to be redeployed to organisations such as the Bureau of Civil Aviation Safety and the Airports Authority of India.

Air India (AI) plans to raise its capacity on domestic routes by using Boeing 787 Dreamliner planes. Currently, it uses the narrow body Airbus A320 on home routes.

Currently, it has 16 Boeing 787s and flies these to Europe, Japan, Singapore and Dubai. It also uses them on two domestic routes, Delhi-Kolkata and Delhi-Bangalore. It has 27 Boeing 787s on order and is expecting three additional planes till March 2015. It is expected to use these to ply on other metro routes.

NEW DELHI: Being a desi full service carrier ( FSC) is no longer enough. Tata-Singapore Airlines' soon-to-be-launched JV Vistara's announcement of introducing "uber luxury" has led to Air India and Jet joining the race to be the best in the full service segment.

While which airline emerges ahead remains to be seen, the consumer is the clear winner in this race.

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