Loss-making Air India has shifted its offices in Washington, Los Angeles and Amsterdam to less expensive premises, saving thousands of dollars every month in rentals.
The national carrier has embarked on restructuring of overseas offices as part to its overall cost-cutting measures. Faced with intense competition from private airlines and high operational cost, Air India has been grappling with huge losses for the past few years.
The airline’s decision to shift its Washington office from January this year has brought down its monthly rental expense by more than USD 2,500.
The monthly rent shelled out by the carrier for its present premises at Washington is USD 2,495 whereas the expense was more than USD 5,000 at the previous location, according to official data.
“The (Washington) office has been shifted to new premises with effect from January 1, 2015. The current rent of the premises is USD 2,495. Air India earlier had office premises with a monthly rent of USD 4,542 plus USD 500 for parking space.
“Shifting the office to the new premises has achieved substantial savings,” Minister of State for Civil Aviation Mahesh Sharma informed Parliament last week.
The carrier has also shifted its offices in Los Angeles and Amsterdam to less-costly premises.
For the new premises in Los Angeles, the carrier is paying little over USD 1,474 per month. At the old location, the monthly rental was USD 1,974. The carrier began operating from the new location since June 2014.
With regard to Amsterdam, the monthly office rental is now 1,520 euros while for the old premises the carrier was shelling out 3,611 euros per month.
According to Sharma, Air India’s Washington office raked in Rs 190.40 crore revenues last fiscal. During the same period, revenues from Los Angeles and Amsterdam offices stood at Rs 116.45 crore and nearly Rs 20 crore, respectively.
In the recent past, the airline had shut its booking offices in Zurich (Switzerland), Chittagong (Bangladesh), Vienna (Austria) while the process is on for closing down its offices in Cairo (Egypt) and Tehran (Iran).
The booking offices in Chittagong and Vienna were closed down in November last while the office in Zurich was shut in October 2014.
Besides, a committee is looking to address issues of downsizing the carrier’s Toronto station and the process is in the final stages, the Minister noted.
In 2013-14, Air India incurred a loss of Rs 6,280 crore, higher than Rs 5,490 crore seen in the previous fiscal. This has been on account of multiple factors including high operating cost environment.