Air India Board met to review the operations of the company and the progress on the implementations of the Turn Around Project (TAP) / Financial Restructuring Plan (FRP)

The Board also decided that Air India may lease out excess capacity of two 747-400 aircraft and some 777-200 LR aircraft (at a future date), after the induction of B787. 

Board also approved the issue of RFP for 787 aircraft under sale and lease back mechanism pending a final clearance from GOI. 

Meanwhile the key performance indicators (Pax revenue) for the month of October 2011 showed an increase of 5.2% even after reduction of capacity by 2.9 % as compared to last year (Oct’2010). Whilst passenger carried increased by 4.9% the passenger load factor improved by 2.6%. The yields per RPKM improved by 4%. 

On a cumulative basis April-October’11 the passenger revenue increased by 4.2%, Passenger Load factor by 2.3% and yield by 4%. 

The Board also took note of the fact that during 2010-11 whereas passenger revenue increased by Rs. 1294 crore mainly due to an increase in yield per passenger kilometer (PKM) for Rs 3.16 to Rs. 3.46 , the following factors negated the impact on profitability: 

Fuel went up by Rs. 1097 crores – Increase of 18% 
Wage cost went up due to increase gratuity provision (Rs 295 crores). 
Depreciation went up by Rs 300 crores due to addition in fleet. 
Interest cost went up by Rs. 860 crores due to increase in borrowing and hike in rates. 

The company is in the process of implementing the FRP which would provide a saving of Rs 1000 crore per annum by way of interest cost. As per the plan approved for the company by the committee of officers the company is trying to achieve an overall load factor of 73% in the near future.