"That is one option - becoming a low-cost airline on domestic operations so that it can compete more effectively with the privately-owned carriers, which increasingly offer more low-cost options on most of the domestic routes," says a spokeswoman for Indian civil aviation minister Praful Patel.
She adds that the state-owned flag carrier could cut costs and increase loads through this measure, and become profitable in the domestic sector. Air
Indian government statistics showed that the country's domestic passenger market shrank 11% in May, with Air
On Thursday, the government agreed to bail out Air
The airline has to submit a cost-cutting plan to a cabinet-level panel within a month, spelling out how it plans to reduce labour costs, cut capacity, and streamline aircraft maintenance and ground-handling services.
It is also re-examining wage agreements, including flying allowances and productivity linked incentives, between management and unions. It is also considering ways to improve productivity, eliminate restrictive work practices, and reduce wasteful expenditure.