DIAL goes into cost-cutting mode as capacity cuts hurt

New Delhi: GMR Group-led Delhi International Airport (DIAL) is feeling the pinch of slowdown in the aviation sector. Postponing recruitment and priority to cost-cutting are on the agenda of the company, which runs the Capital’s Indira Gandhi International (IGI) Airport , since revenue growth is likely to slow down due to decline in passenger traffic.
“As per our agreement with the government, airport tariff had to be increased by 10% this year. But the government didn’t allow us to do that as aviation sector is in the grip of recession and airlines’ losses are mounting. Due to this, we would see a revenue loss of Rs 35 crore in this year. To counter the situation, we have decided to postpone recruitment for 3-6 months and scale down the hiring process from 800 to 600 people,” a top GMR official told ET.
A DIAL spokesperson, however, denied that there was any plan to postpone recruitment. “Given the fact that Airports Authority of India (AAI) will get its employees back next year, we would hire more people,” he said. Over 2,000 AAI employees are on deputation with DIAL.
It has sought industry status to save on electricity costs. It currently enjoys ‘mixed’ status (business and industry) and ends up paying higher electricity tariff as compared to industrial units. If the airport operator gets industry status, it will pay 50 paise less on each unit of electricity consumed.
When the government corporatised the Delhi airport and handed it over to GMR Group-led consortium, DIAL got nearly 2,300 employees of AAI to run the airport.
31/07/08 Nirbhay Kumar/Economic Times

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Categories: Airports Jul 2008