IANS/New Delhi

Cash-strapped national carrier Air India is all set to rent out its excess property across the country and encourage in-flight advertising to augment revenues.

"Under our new financial plan, we have decided to rent out property at prime locations to banks and other companies," a senior Air India official said.

"We have currently identified 22 such properties and bids for 19 have already been received."

The company is also looking at renting out more floors of its iconic 22-storey Air India building at Nariman Point, which houses the chairman and managing director's office.

Until recently, several bids have failed to attract potential customers as locations such as Nariman Point have lost out their charm of being in the central business district to the Bandra-Kurla Complex, for instance.

However, State Bank of India (SBI), information technology major Tata Consultancy Services (TCS), the Directorate General of Shipping and the Sales Tax Department have rented out a few floors at Nariman Point or shown interest in doing so.

Renting out the building is expected to annually fetch the company around Rs1bn. The airline has already shifted its key executives to its New Delhi office at Airlines House on Parliament Street.

Apart from renting out properties, the company plans to generate additional revenue by placing advertisements on aircraft bodies and in-flight areas, which the official claimed has generated substantial interest from advertisers, as this kind of advertisement has assured visibility.

The airline is also mulling creating advertisement space on its boarding passes and bag tags. This form of advertising has been around for some time and is gaining popularity. Air India expects substantial revenue addition from the advertisement space on some 22mn boarding passes per annum.

A third way to generate revenue is allowing in-flight sampling of products by consumer durables companies.

In the early 2000s, the airline used to provide free VSNL prepaid international SIM cards to its business class and frequent flier passengers.

The move is expected to provide financial relief to the company, which is currently reeling under accumulated losses and loans of around Rs675bn.

The company has taken Rs212bn as a working capital loan, Rs220bn worth of long-term loans for aircraft acquisition, Rs46bn of vendor bills and an accumulated loss of Rs203bn.