Airlines put a freeze on freebies

New Delhi: Loss-making airlines — which find operational cost escalating and passengers dwindling — have now started looking at every possible way of saving money. On passenger front, it means putting a freeze on all freebies earlier given to them.
And on employee front, most airline have put a freeze on further recruitments especially of high salaried personnel like pilots, engineers and expats. Some are even retrenching staff by up to 30%. Airlines like Go and Deccan are learnt to have sent back personnel, mostly expats. While Go refused to comment, Deccan founder Captain Gopinath said: Airlines need Rs 1,000 (LCCs) to Rs 2,000-2,500 (for full service) more per seat to break even.
There are various ways of getting it and till that happens, there will be issues. The expats were hired for a limited time and some have been sent back.
Air India-domestic (Indian Airlines before merger) has stopped giving free toffees to economy and fruit baskets for executive class fliers. AI has also decided to discontinue the 5% commission ticketing agents used to get on selling their tickets to cut down distribution costs, a move that other airlines are likely to follow.SpiceJet has stopped giving free toffees, cookies and water on its flights. The big cost cutting is expected from route rationalisation but are looking at every other area also. Considering that a toffee costs Re 1 and 50 lakh people fly with us annually, the saving is Rs 50 lakh. Similarly, boarding cards’ thickness has been reduced, leading to a saving of Re 1 per card. So these small things have led to Rs 1 crore saving," SpiceJet CFO Partha Basu said.
26/06/08 Times of India

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Categories: Indian Aviation- In General Jun 2008