Air India mulling cost-control measures

Air India mulling cost-control measures
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First Published: Tue, Jun 10 2008. 02 49 PM IST
Updated: Tue, Jun 10 2008. 02 49 PM IST
PTI
Mumbai: National air-carrier Air India is contemplating a slew of cost-cutting measures to overcome mounting losses due to high operating costs.
Several austerity measures are believed to have been discussed by the management in a recent Board meeting held with a view to cutting losses, now aggravated by rising international crude prices.
“The measures discussed include a 25% cut in wages, fuel reimbursement and sales promotion budget as well as in the variable Productivity Linked Incentives (PLI),” official sources said.
A 25% cut may also be implemented with regard to driver salary, car maintenance and discontinuation of clothing allowance. Maintenance of buildings and residential apartments is to be taken up only once in three years, especially internal painting.
There have also been suggestions to set up revenue targets for each region and in case of non-attainment of these targets, Executive Director from these stations have to be recalled.
Sources said that Air India’s Finance Department, in its presentation to the Board and later given to Civil Aviation Minister Praful Patel, has also suggested that payment to the Indira Gandhi Rashtriya Udaan Academy be discontinued to control costs.
The academy in Rae Bareilly is the only Government- managed institute for training civil pilots in the country.
The collective losses of the combined entity of Air India and Indian airlines are understood to be in the range of Rs1,500 crore for FY08, analysts say.
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First Published: Tue, Jun 10 2008. 02 49 PM IST