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Business News/ Companies / News/  Air India shifts to cheaper offices abroad
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Air India shifts to cheaper offices abroad

According to official data, the national carrier has brought down its Washington rent alone by more than $2,500 per month

In 2013-14, Air India incurred a loss of `6,280 crore, higher than `5,490 crore seen in the previous fiscal. Photo: Mint (Mint)Premium
In 2013-14, Air India incurred a loss of `6,280 crore, higher than `5,490 crore seen in the previous fiscal. Photo: Mint
(Mint)

New Delhi: Loss-making Air India has shifted its offices in Washington, Los Angeles and Amsterdam to less expensive premises, saving thousands of dollars every month in rentals.

The national carrier has embarked on restructuring of overseas offices as part of its overall cost-cutting measures. Faced with intense competition from private airlines and high operational cost, Air India has been grappling with huge losses for the past few years.

The airline’s decision to shift its Washington office from January this year has brought down its monthly rental expense by more than $2,500. The monthly rent shelled out by the carrier for its present premises at Washington is $2,495 whereas the expense was more than $5,000 at the previous location, according to official data.

“The (Washington) office has been shifted to new premises with effect from 1 January 2015. The current rent of the premises is $2,495. Air India earlier had office premises with a monthly rent of $4,542 plus $500 for parking space. Shifting the office to the new premises has achieved substantial savings," minister of state for civil aviation Mahesh Sharma informed Parliament last week.

The carrier has also shifted its offices in Los Angeles and Amsterdam to cheaper premises. For the new premises in Los Angeles, the carrier is paying little over $1,474 per month. At the old location, the monthly rental was $1,974.

The carrier began operating from the new location since June 2014. With regard to Amsterdam, the monthly office rental is now €1,520 while for the old premises the carrier was shelling out €3,611 per month.

According to Sharma, Air India’s Washington office raked in 190.40 crore revenues last fiscal. During the same period, revenues from Los Angeles and Amsterdam offices stood at 116.45 crore and nearly 20 crore, respectively.

In the recent past, the airline had shut its booking offices in Zurich (Switzerland), Chittagong (Bangladesh), Vienna (Austria) while the process is on for closing down its offices in Cairo (Egypt) and Tehran (Iran). The booking offices in Chittagong and Vienna were closed down in November last while the office in Zurich was shut in October 2014.

A committee is also looking to address issues of downsizing the carrier’s Toronto station and the process is in the final stages, the minister noted.

In 2013-14, Air India incurred a loss of 6,280 crore, higher than 5,490 crore seen in the previous fiscal. This has been on account of multiple factors including high operating cost environment.

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Published: 08 Mar 2015, 09:53 PM IST
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