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Air India hopes to fly into black with Dreamliner

NEW DELHI — India’s government on Wednesday said the purchase of 27 Boeing 787 Dreamliners should help Air India fly into the black and warned it cannot give any more funds to the ailing flagship carrier.

The first new aircraft landed in New Delhi on Saturday, ending a four-year wait by the state-run national airline to add the next-generation jet to its fleet.

“We hope the Dreamliner will take Air India back to the good old Maharajah days,” aviation minister Ajit Singh said, referring to the airline’s mustachioed mascot who was a familiar face when the carrier dominated India’s skies.

The carrier’s once-commanding market share has shrunk to 18 percent in the face of fierce competition from private and low-cost carriers that have taken to the air since India liberalised its aviation sector in the 1990s.

Speaking to reporters at a ceremony for the Dreamliners at New Delhi’s Indira Gandhi International Airport, Singh urged Air India to take “aggressive” measures to cut costs.

He said the government could not afford to give any more money to Air India after clearing in April a $5.75 billion bailout package to help the carrier, which has accumulated debts of $8.3 billion.

“If Air India is to become competitive with rest of the industry, then it has to take aggressive cost-cutting measures. With today’s fiscal constraints, the government cannot afford to give any more money to Air India,” Singh said.

The company has some of the world’s best-paid pilots and around 30,000 regular staff, giving it one of the highest ratios of employees to planes globally.

Analysts say the workforce needs to be halved to make the airline competitive.

The 27-Dreamliner deal is part of a 2005 multi-billion-dollar project to equip Air India with 68 wide-bodied aircraft. Air India is the fifth airline in the world to take delivery of a Dreamliner, according to Boeing.

The plane, painted in the red and yellow livery of Air India, will make its first commercial flight on September 19 to the southern city of Chennai from New Delhi.

It will fly to Europe and Australia as soon as Air India’s pilots become more familiar with the aircraft, likely during the winter season.

The Dreamliner is seen as becoming the mainstay of loss-making Air India’s global operations and airline officials hope it will attract new customers.

It is also crucial for Air India’s turnaround plan because it will replace some older, fuel-guzzling planes.

India’s fourth-largest airline by market share has been hit hard by high fuel prices and fierce competition which have added to its labour problems, crushing debt and a costly merger in 2007 with domestic carrier Indian Airlines.

For Air India, the Dreamliners have been configured to have 256 seats — 18 business class seats and 238 in economy.

They were initially due for delivery between 2008 and 2011 but a row over demands by the airline for compensation for the delay held up delivery.

“The last deliveries will be in 2016,” the minister said, adding Air India will receive five more Dreamliners this year.