Air India seeks $459 mn govt aid
State-run carrier Air India is seeking more than Rs 20 billion (USD 459 million) of aid from the government to help it purchase aircraft, its chairman said on Thursday.
“It is for equity, and something of a soft loan,” Raghu Menon told reporters.
A recent circular proved the crunch faced by the company. It said, “Foreign tours should be undertaken only for absolutely essential purposes. All foreign tours henceforth should be scrutinised at the functional director level and recommended to the Chairman only in respect of critical cases,” the circular said.
With its losses mounting to Rs 2,100-crore and with air turbine fuel prices on the rise, the national air-carrier has been forced to resort to cost-cutting measures to boost its sagging bottomline.
Air India is expected to implement a rigorous cost-cutting regime based on the recommendations of its Finance Department which was presented before its Board a couple of months ago.
The circular said that foreign travel should be restricted to the bare minimum number of persons who are operationally required to travel and that “Accommodation at overseas stations should as far as possible be at crew hotels where facility of lower room-charges is available.”
Airline staff has also been instructed to travel only by economy class, which offer lower fares.
The cost control measures to be implemented cover areas such as contractual/casual employment/outsourcing, material consumption, outside service and repairs of aircraft, return of lease aircraft, fuel conservation, pooling of vehicles/fuel bills reimbursement and temporary postings.