IN A bid to maintain a healthy balance
sheet, state-owned passenger carrier Air India plans to cut its total
expenses by Rs.1,400 crore in the coming financial year.
In a circular issued to all employees,
Air India plans to stop hiring all non-essential staff, curbing
transfers, field visits and...
holding meetings and conferences in five
star hotels.
The circular asked employees to return
immediately from outstation assignments to save on hotel and other
costs.
Employees have also been told that
nearly 10 percent of their reimbursement amounts will be deducted to
let the airline remain afloat.
Wages owned on account of extra time
will also be reduced.
No new vehicles, office machinery and
non-essential items will be bought. Immediate sales of old computers
and other items has been mandated.
The airline has also been advised to
use less space at major airports like Delhi and Mumbai to reduce
rentals.
The staff has also been advised to
curtail outstation travel, engineers have been asked to service
aircraft at only major stations and airport managers are to identify
extra manpower that can be asked to go.
Costs on account of promotional
activities, freebies and entertainment allowances will also be
reduced.
The airline ended the last fiscal with
a positive EBITDA (earnings before tax, interest, depreciation and
amortization) of Rs.65 crore on the back of higher passenger revenue
and yield as well as passenger numbers.
On April 12, 2012, the beleaguered flag
carrier got a new lease of life when the government approved the
turnaround and financial restructuring plans for Air India.
The bailout came with stringent riders
like on-time performance, maintaining healthy load factors and
hiving-off maintenance, repair and overhaul as well as ground
handling businesses.
Air India is expected to make cash
profits from 2018, but it will take time to earn net profit or the
actual profit.
Air India borrowed Rs.21,412 crore to
buy new aircraft and Rs.22,368 crore as working capital. Its current
losses stand at Rs.22,000 crore.
National carrier Air India to cut expenses by Rs.1,400 crore then why another IPS Officer as Vigilance Officer is being inducted. Will it not be an extra burden of cost on Air India ? No answer from the Government. Cuts are only for employees.
ReplyDelete