Air India's net loss for its fiscal year 2012-13 narrowed to Indian rupees (Rs) 52 billion ($949 million) from Rs75 billion in 2011-12.
In the 12 months to 31 March 2013, revenue rose by 9.6% to Rs161 billion, with the state-owned airline carrying 14.1 million passengers compared with 13.4 million the previous fiscal year, the ministry of civil aviation said in a statement.
Air India's passenger load factor was at 72.7% during the period, compared with 68% a year ago.
During the fiscal year, the carrier found savings in several areas including staff cost reductions (Rs2.4 billion), reduced booking agency commissions (Rs1.2 billion), and interest paid on loans (Rs1.7 billion).
In addition, it expects that its fuel costs are likely to fall by Rs5 billion annually owing to revised agreements with suppliers signed in January 2013.
For the carrier's 2013-14 fiscal year, it forecasts a 20% jump in revenue to Rs193 billion, and net losses to narrow to Rs39 billion.
The ministry adds that the hiving off of MRO unit Air India Engineering Services Ltd (AIESL) and ground handling unit Air India Air Transport Services Ltd (AIATSL) has commenced, with the pair scouting for both domestic and international MRO work.
"They have already finalised a tie-up with Go Air and IndiGo airlines for providing MRO services and are in touch with number of other domestic and international airlines for the same," says the ministry of transport. "AIATSL has already started contacting various airlines in India and abroad to expand their ground handling business."
In addition, the carrier is looking to sell "unutilised properties" in several Indian cities. The carrier hopes to earn Rs10 billion in 2013-14 from property sales.