Air India's parent, the National Aviation Company of India, is targeting to cut costs by 15 billion rupees (S$325 million), says civil aviation minister Praful Patel.
The struggling carrier will also work to increase revenue by 12 billion rupees, he adds.
Air India posted a net loss of 56 billion rupees ($1.2 billion) for the fiscal year ending 31 March 2009.
The Government is looking at all options to help the carrier, says Patel.