Under-pressure Air India vows to cut staff, operating costs
20 January 2015
Under pressure from the government, India's loss-making national carrier Air India said on Monday, it will cut its costs by about 6 per cent of its total outlay in the next financial year.
Air India, which has close to a fifth of the Indian domestic market, has long been afloat only on taxpayer money due to overstaffing and other inefficiencies. The airline had received a Rs35,000-crore bailout package from the government in 2002.
The airline said in a circular dated 15 January that it would identify ''surplus staff'', freeze contractual hiring, and discontinue unprofitable flights to reduce by 10 per cent its variable spending of Rs1,4000 crore.
Restrictions on staff travel and hospitality have also been introduced, Air India said.
''The ministry of civil aviation has directed that a 10 per cent cut be imposed ...'' said AI chairman and managing director Rohit Nandan in a circular to senior staff.
Staff travel and hospitality have also been restricted and ''wage increases for local staff ... will not be entertained'', said the circular.
Air India, once the country's monopoly airline, has not reported an annual profit since 2007.
All but one of the major carriers in India are losing money because of high operating costs and some of the lowest fare prices in the world amid intense competition. The exception is IndiGo.