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Govt tells Air India how to get into shape

Source : BUSINESS_STANDARD
Last Updated: Fri, Aug 15, 2014 02:46 hrs
Air India

Civil Aviation Minister Ashok Gajapathi Raju Pusapati has issued guidelines to improve the efficiency of ailing Air India.

The minister told Air India in a directive earlier this week to conduct profitability analyses on individual routes. The airline has been asked to send route-specific financial figures by the first week of every month. "Profitability should be given priority," Pusapati said.

The airline must deploy smaller aircraft in cities that have limited but steady demand, renegotiate contracts for redundant aircraft, and manage inventory better to cut costs on spares.



"The financial performance of Air India should be periodically reviewed by the top management and quarterly reports should be submitted to this office, along with reasons for increase or decrease in profitability," the guidelines said. A quarterly review of Air India will be held by the civil aviation secretary followed by a presentation to the minister.

The first-of-its-kind guideline to save costs tells the airline to refuel at airports with a lower fuel tax. Air India has been asked to improve revenues by filling seats in business and first class, by focusing on cargo, and by improving service standards.

The minister told the airline to reduce staff by redeploying 2,000 employees in other units of the aviation ministry. He also wanted a younger cabin crew, the older lot is to be shifted to ground operations. He has also said that indiscipline, which leads to flight delays, must be tackled firmly.

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