A five-member committee has been set up by aviation minister Ajit Singh to suggest measures for cost cutting and optimal utilisation of resources in ailing Air India (AI).
The committee, headed by IIM Ahmedabad’s professor Ravindra H Dholakia, will carry out an analysis of AI’s all ‘heads of expenses’ in the light of best practices adopted by various other airlines in the world and would examine and analyse measures including cost-cutting, adopted by other ‘turned around’ airlines in the past. The committe would also identify loopholes in the existing structure and functioning of AI that leads to wasteful expenditure and suggest measures for plugging such them.
Dholakia was earlier associated with AI as a member of Justice Dharmadhikari Committee.
“Although, the committee has been asked to submit its report in 2 months, it has also been asked to give immediate interim recommendations without waiting for the final report, so that these can be implemented in AI immediately without any loss of time,” the aviation ministry said in a statement.
The committee, it said, will analyse various cost components and identify those expenses and costs which can be abolished immediately, or reduced in phases or curtailed after sometime in future.
“It will also analyse the inventories of spare-parts and suggest a system of optimal inventory management and disposal of obsolete inventories. It will critically review the expenses on overseas offices and suggest measures to reduce such expenses, will analyse the ATF utilisation by AI and suggest measures to reduce/optimise ATF utilisation in the background of best practices followed by other airlines,” the ministry said.
Recently, the aviation minister, while reviewing AI’s functioning, had expressed concern on the projected net shortfall of Rs. 404 crore per month.