Air India mulling slew of cost-control measures

Several austerity measures are believed to have been discussed by the management in a recently-held Board meeting with a view to cutting losses, now exarberated by surging international crude prices.        

Belt-tightening measures believed to have been discussed include a 25 per cent cut in wages and variable productivity link incentives (PLI), a 25 per cent cut in fuel reimbursement, driver salary and car maintenance, discontinuation of clothing allowance and a 25 per cent cut in the sales promotion budget.        

In its presentation before the Board, Air India's Finance Department has also suggested discontinuation of payment to the Indira Gandhi Rashtriya Udaan Academy (IGRUA) as part of controlling costs.        

The same presentation has been given to Minister of State for Civil Aviation, Praful Patel.        

The Academy, which is located in Rae Bareilly (UP), is the only Government-managed institute for training civil pilots in the country.        

Maintenance of buildings and residential apartments to be taken up only once in three years, especially internal painting, it said.        

It has also been suggested to set revenue targets for each region and in case of non-attainment of these targets, Executive Director to be recalled from these stations.        

According to analyst, the collective losses of the now combined entity of Air India and Indian Airlines, are understood to be in the range of Rs 1,500 crore last fiscal.