Air India to shed staff, planes, flights

Air India will soon stop flying on 20 unprofitable routes, reduce fleet strength from 146 to 90, and offer both ‘leave without pay’ and voluntary retirement scheme (VRS) to some of its employees. Samiran Saha reports.

Air India will soon stop flying on 20 unprofitable routes, reduce fleet strength from 146 to 90, and offer both ‘leave without pay’ and voluntary retirement scheme (VRS) to some of its employees.

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These were among the proposals put forward by top officials of the airline to the Group of Ministers on Aviation, headed by Finance Minister Pranab Mukherjee, last week.

Air India posted a loss of over Rs 5,000 crore in 2008-09 and expects the figure to rise to

Rs 7,200 crore this year. It has a bank overdraft of Rs 16,000 crore on which it pays interest of around Rs 4 crore every day.

“Our route rationalisation committee will soon decide which route we’re going to close,” a top AI official told HT.

Both international and domestic routes will be curtailed. Among the international routes being considered are Srinagar-Sharjah, Delhi-Osaka and Delhi-San Francisco.

Air India also hopes to reduce its annual Rs 3,500-crore wage bill by offering employees three years of leave without pay, during which they can take up other jobs, without break in service.

“VRS is also being considered, but in the airline’s present financial condition, golden handshakes will not be possible,” said the official.

Air India operates 37 leased aircraft. “The leases will expire over the next two years and won’t be renewed,” the official said.

Some more old aircraft will be sold.