Letters: Cost-control measures

This refers to ‘AI bosses can’t look beyond cutting pay, complain engineers’, September 23. It has been stated in the report that the “entire and misplaced focus of the management was on slashing pay in the name of a turnaround plan” and “the focus of the management has been only on slashing employees’ wages. There are many options they can look at to cut costs”.

These statements are incorrect. Air India has, in recent months, initiated several cost- control measures across the board. As the loss anticipated for this year is huge, measures have been initiated to reduce expenditure in various areas:

 

Saving in procurement of material and control of inventories 
 

Saving on fuel 
 

Saving in landing/navigation charges 
 

Reduction in interest payment on aircraft loans 
 

Reduction in interest of loans availed for working capital 
 

Reduction in lease rental costs 
 

Rationalisation of routes 
 

Closure of offline offices 
 

Curtailment of foreign travel by employees 
 

Recall of India-based officers from abroad

Details of these initiatives have been shared with all unions on more than one occasion. It is well known that the global aviation industry has hit all airlines, including Air India. The drop in passenger traffic due to economic recession. low fares and poor yields in a market having surplus capacity, have led to a serious financial crisis. In many airlines in India and abroad, employees have either lost their jobs or suffered huge pay cuts because the financial crisis has been very severe and the airlines have had to take hard measures for survival.

Jitender Bhargava
Executive Director 
(Corporate Communications)
Air India Mumbai