Ministry seeks white papers from AI to put it back in the black
The Civil Aviation Ministry has asked state-run carrier Air-India to prepare two separate white papers, one on cost-cutting and another on revenue and commercial aspects, to help the airline tide out of its financial mess, reports HT Correspondent.business Updated: Jun 02, 2009 21:25 IST
The Civil Aviation Ministry has asked state-run carrier Air-India to prepare two separate white papers, one on cost-cutting and another on revenue and commercial aspects, to help the airline tide out of its financial mess.
The airline, which was formed through a merger of international carrier Air India and domestic carrier Indian Airlines in 2007, had accumulated losses of Rs 4,334 crore till March 31.
In 2008-09 the firm incurred losses of almost Rs 3,000 crore.The airline has now sought an infusion of Rs 4,010 crore through a mix of equity and soft loans to cover its ambitious fleet expansion programme and also to meet its working capital requirements.
The airline plans to curb costs through a variety of measures which include a voluntary retirement scheme and a voluntary leave scheme. It also plans to shut down high-rental offices, cut fleet deployment on unviable routes and reschedule flight timings to make the airline more attractive for passengers, an airline executive, who did not wish to be identified, told HT.
Also as a step towards cutting costs Air India has asked its employees not to ask for upgrade to higher classes of travel while on tours and has also announced cut in employees’ perks.
To help the airline shore up capital the government has also plans to list the airline in the bourses once the market conditions are good.
“This is an area of intent, when and how are yet to be worked out,” Civil Aviation Minister Praful Patel said on Moday after taking charge for a second term.
First Published: Jun 02, 2009 21:23 IST