Air India told to get into shape urgently

The Govt asked Air India, caught between a deepening liquidity crisis and poor passenger load, to be “leaner and trimmer”, reduce cost of operations and improve performance by “leaps and bounds” to secure the cash it needs to stay afloat, reports Aurangzeb Naqshbandi.

The government on Wednesday asked Air India (AI), caught between a deepening liquidity crisis and poor passenger load, to be “leaner and trimmer”, reduce cost of operations and improve performance by “leaps and bounds” to secure the cash it needs to stay afloat.

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“The government will support Air India but there won’t be an open-ended chequebook,” civil aviation minister Praful Patel, 52, told reporters after an hour-long meeting with Prime Minister Manmohan Singh to discuss measures to prevent the national carrier from getting grounded. “It has to shape up.”

The AI management has been given a month’s time to prepare a restructuring plan —- including a re-look at operations, finance and a possible top management shakeout —- even as the minister handed out a stern “perform-or-perish” message to the airlines’ 31,000 employees.

A panel, headed by cabinet secretary K M Chandrasekhar, comprising Prime Minister’s principal secretary T.K.A. Nair, civil aviation secretary M. Madhavan Nambiar and finance secretary Ashok Chawla, will examine the plan, Patel said.

The company has already announced plans to slash staff costs by more than 15 per cent from its current Rs 3,000 crore annual wage bill. AI has accumulated losses of Rs 4,334 crore.

Patel did not disclose how much cash would be infused, but said the support might come through equity and loans.