Here's how Air India can be resuscitated

‘Cash-strapped', 'struggling to stay afloat' -- phrases like these still continue to haunt India's national carrier Air India.

But how can the airline resurrect itself? Data shows that going local and cutting down on international flights could turn out to be the single-biggest cost-saving measure. But is the airline and the government listening? CNBC-TV18's Sohini Dutt and Sindhu Bhattacharya report.

Indigo is the king of the Indian skies, Jet Airways is firming up its domestic operations, Vistara is up and running: where does this leave Air India?

Here's why the national carrier should focus on domestic routes instead of mindless overseas expansion.

Air India deploys just 25 percent of its capacity on domestic flights but they account for nearly 40 percent of its revenues. Not just that: the airline earns Rs 6 revenue per passenger on domestic routes against just Rs 3.50 for every international passenger.

This is a clear proof that the Maharaja must consolidate his grip on the domestic turf first. Air India has undertaken some work already by cutting down flights to Moscow, Dhaka and others. But a lot more is still to be done.

Consider this: During the 10 months of FY15 under review, the airline has lost a whopping Rs 500 crore rupees on the Ahmedabad-Mumbai-Newark connection.

Another Rs 200 crore rupees has gone down the drain on the Delhi-Sydney-Melbourne connection, which was started with much fanfare.

The Ahmedabad-Mumbai-London flight led to Rs 250 crore losses, and the Amritsar-Delhi-London flight accounted for Rs 200 crore losses.

In fact, the 39 international flights forced the airline to incur 70 percent of its operational loss in 10 months FY15.

The Dholakia committee had recommended that the restructuring or axing loss-making flights will be the single biggest cost saver.

The committee had pegged that Rs 580 crore can be saved each year by restructuring loss-making flights and another Rs 450 crore rupees can be saved by dynamic pricing.

The Dholakia committee had laid out a roadmap for the airline to save over Rs 3,200 crore in costs. But there is no clarity if these measures will be followed.

If Air India wants to be a force to reckon with: retaining the local flavour looks like the best bet.

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