Air India packs up cargo division

January 11, 2012

Air India is closing down its floundering cargo business and has put up its fleet of Boeing freighters for sale to cut losses and raise more revenue.

In addition to the six planes, Air India has also planned to sell off eight aircraft engines, four auxiliary power units, aircraft seats and spares to raise money. Four Airbus A310 freighters have already been sold.

This decision comes before the Group of Ministers meeting to revive the national carrier. The government will review measures taken by the company to enhance revenues and check its debt before approval.

A top airline official expressed that it is more than the deteriorating economy that is hurting Air India’s cargo business, Mail Today reported.

“It is the lack of a critical distribution network, warehousing facilities, mismanagement and inadequate infrastructure that have driven away business from Air India’s cargo division,” he said.

Air India has already offered to lease out five of its eight Boeing 777-200 planes to bring in funds. The decision has also been made to sell and lease seven Boeing 787 Dreamliners they will receive in June this year.