New Delhi: Air India’s new board has asked the national carrier to compile a report on the freebies and perks offered to serving and retired officials as it prepares a second turnaround plan in less than a year, which will determine whether the airline gets the next tranche of state funds.
Integration process: The airline has awarded a $190 million, 10-year IT contract to SITA to set up a common reservation system. PTI
“This will include all accounted and unaccounted perks for retired, working officials,” said a government official familiar with the process, who didn’t want to be named.
The 6 April decision was taken by the newly appointed board that includes Anand Mahindra, vice-chairman and managing director of Mahindra and Mahindra Ltd, Federation of Indian Chambers of Commerce and Industry general secretary Amit Mitra, industrialist Harsh Neotia and former Indian Air Force chief Fali H. Major.
This comes after the aviation ministry last month directed the state-owned carrier run by National Aviation Co. of India Ltd to award free life-long upgrades to first-class travel for two dozen retired secretaries and free upgrades to their immediate family members. The carrier also offers free tickets and upgrades to retired officials and immediate family members, besides pension benefits. The airline has never disclosed the amount it loses because of such perks.
A report is likely to be submitted at the next board meeting, the date for which is yet to be finalized, said another official who also didn’t want to be identified.
In a bid to save costs, Air India last year downgraded all senior airline employees to economy class travel but reversed the order later in the same year. The government has said Air India needs to show substantial savings, without specifying a number, before it infuses an additional Rs1,200 crore in equity.
The ministry’s March directive, a copy of which is with Mint, asked the carrier for the free upgrades for certain retired bureaucrats and their immediate families.
Air India has lost in excess of $2 billion (Rs8,900 crore today) over the past two years and has been seeking government support to tackle its debt on account of aircraft purchases valued at Rs50,000 crore.
“No government across the world provides this,” said Mohan Ranganathan, a Chennai-based aviation safety expert and former Indian Airlines employee, referring to the ministry’s directive. “The first thing that the new COO has to do is put a stop to is this nonsensical practice.”
Air India picked a new chief operating officer in Gustav Baldauf at the 6 April meeting to turnaround the debt-ridden firm.
Meanwhile, the airline said on Thursday that it was speeding up its information technology integration process and has awarded a $190 million, 10-year IT contract to Switzerland-based SITA to set up a common reservation system.
“Implementation of the Horizon Passenger Services System will complete the merger of Air India with the former domestic carrier Indian Airlines and enable us to align processes and systems to meet Star Alliance standards,” Air India chairman and managing director Arvind Jadhav said in a statement on Thursday.
Air India has applied to join the Star Alliance grouping of carriers by the end of this year and needs to meet minimum standards before that. Air India travellers would then able to connect seamlessly to destinations on flights of more than one airline, besides availing other benefits.
SITA has been granted about 300 days to implement the system, according to an Air India official who asked not to be named. The contract was signed on April 1, the official said.