Air India has no plans for aircraft deferrals

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Air India has no immediate plans to defer the aircraft it has on order despite a tough economic environment and a crowded Indian aviation market.

This is because the airline see some signs of recovery in the Indian economy and it wants to wait and see how things shape up first, says an Air India spokesman.

The new aircraft are also coming in as the airline steadily sells older aircraft and returns leased aircraft, he adds.

"These new aircraft do not represent a huge increment in capacity," says the spokesman. "The Indian economy is showing signs of improvement, which could increase passenger numbers. The government's economic stimulus appears to be working and GDP growth could return to 9%."

Air India has taken delivery of 48 of the 111 aircraft it has on order. These include 11 Boeing 777s, 15 Boeing 737-800s, and 22 aircraft in the Airbus A320 family. Another 777 is due to arrive in mid July.

The Indian flag carrier said earlier that it aims to cut 5 billion rupees ($103 million) per year from its total wage bill of 30 billion rupees as it tries to keep its costs down. It will also consider ways to improve productivity, eliminate restrictive work practices, and reduce wasteful expenditure.

In mid June, the airline delayed $70 million in salaries for two weeks, citing a challenging economic environment.