Air India to cut business class seats

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Cash-strapped carrier Air India will refurbish up to 49 aircraft to reduce the number of business class seats in order to capture a larger number of economy passengers.

The state-owned carrier is proposing that the number of business class seats on its Airbus A320s and Airbus A321s to be cut from 20 to 12. These seats will instead be replaced by 12 to 18 economy seats, depending on approvals from manufacturer Airbus.

"This is mainly due to the shift to low-cost, budget travel by the majority and where business class seats have been restricted only to directors and above and government officials," said a spokesman when contacted.

To cut debt, the loss-making carrier will also be converting its short-term loans to long-term ones, reducing interest rates, issuing non-convertible debentures guaranteed by the government and refinancing some of its high-cost debts, he added.

Air India is also looking at importing jet fuel to lower its operating costs, and is in talks with interested parties to sort out the logistics of such imports.

"Once the economics is established, Air India will then apply for the necessary regulatory approvals for the import of air turbine fuel," said the spokesman.

Just last week, the Indian government had given approval for domestic carriers to directly import jet fuel in a move aimed at lowering the airlines' operating costs.

Jet fuel prices in India are up to 40% higher than those in the international market because of high base price and even higher taxes, both at the national and state level.