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AI to staff: Fly cheap, give up privileges

india Updated: May 24, 2009 00:54 IST
Soubhik Mitra
Soubhik Mitra
Hindustan Times
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The bleeding Maharaja’s retinue has switched to flying economy class.

Burdened with losses, Air India is making all its employees, from managers to top-rung executives, give up some of the privileges of the past.

On Friday, Arvind Jadhav, the newly-appointed chairman and managing director, sent an e-mail to the staff asking them to travel economy class.

“We need to tighten our belts,” said Jitendra Bhargav, executive director, corporate communication. “The airline industry is passing through a difficult period.”

About 8,000 of AI’s 31,000 employees were entitled to business and first class travel till the e-mail. “A manager is eligible for business class and a senior manager is eligible for first class travel,” said an employee, requesting anonymity.

Others said the move would enable the airline to save Rs 3 to Rs 4 crore in a year.

Bhargava declined to comment on the expected savings.

The National Aviation Company of India, the holding firm formed after the merger of Air India and domestic carrier Indian Airlines, has nearly doubled its losses for 2008-09 to roughly Rs 4,000 crore from Rs 2,226 crore in 2007-08.

The circular also slashed the amount for furnishing the residences of executive directors and general managers, by half and 25 per cent respectively.

It put a restriction on foreign travel and made prior approval mandatory for trips abroad exceeded four visits in a year. The consistent drop in flier traffic seems to have made the situation worse as these measures were introduced.