Air India Looks Forward To Additional Rs 1,000 Crore Revenue After Revamp Of Premium Seats

Soon after shelving the failed privatization plan, the debt-laden Air India is showing signs of resilience with the top management geared to spruce up its business and first class cabins on international flights. The plan to revamp the premiums seats is seen as an attempt to boost the air carrier's revenues since these seats command relatively higher prices, and hence more revenue for the air carrier, in comparison to economy-class tickets.

With these modifications, the Air India's chairman and managing director Pradeep Singh Kharola is looking forward to raising the "passenger load factor" of business and first class seats to 80 per cent in the coming time. This is likely to bring in additional revenue of Rs 1,000 crore per annum, said Kharola, reported Reuters.

As of now, the occupancy rate of business and first class seats in Air India is a modest 60 percent in the flights to North America and Europe.

Passenger load factor implies the capacity utilization of public transport services including that of an airline, used to assess how efficiently the air carrier fills its seats and generates revenue.

Air India airline also unveiled a new food menu and amenities for passengers. In its quest to embrace a new and refreshing look, the airline also unveiled new uniforms for its airline staff.

The cancellation of divestment plan wherein the government (Air India's owner) was set to sell upto 76 percent stake in the airline was seen as a major setback since the selloff was considered an opportunity to pay around $5.1 billion debt out of its total financial liability of around $7 billion.

However, the airline, unlike market watchers and privatization enthusiasts, seems to have moved on fast enough.

The airline's revamp is not only restricted to some ornamental changes or minor touches to the interiors, the air carrier is set to bring an overhaul with a machete, and not merely with scalpel.

The Minister of state for civil aviation Jayant Sinha said that Air India is looking at flying to new destinations in Africa, Australia and North America.

Air India has six subsidiaries with total assets worth nearly $4.6 billion. It has an estimated $1.24 billion worth of real estate, including two hotels, where ownership is split among various government entities.