Air India warns of 'moment of truth'

New Delhi: Air India, the country's ailing flag carrier, is looking for ways to cut Rs5bn ($103m) from its staffing costs, a reduction of about 17 per cent of its total wage bill.
The state-run carrier is struggling to stay in business while awaiting a hoped-for government bail-out.
Arvind Jadhav, the recently appointed chairman and managing director, has already warned Air India's 31,000 employees of tough times ahead, saying the carrier had reached "the moment of truth".
"This is an hour of crisis for all of us," Mr Jadhav said in an e-mail circulated to staff members. "It is a fight for survival - the survival of our airline. I am looking for every single employee of our airline to rise to the challenge."
Air India said yesterday that a four-member committee would re-examine its wage agreements with the unions, and talk with union leaders on cost cuts.
The carrier is also looking at "improving productivity of employees, elimination of restrictive work practices and reducing wasteful expenditure", the statement said.
With Air India's estimated losses of about Rs40bn for the financial year ending in March, and an accumulated debt burden of around $4bn, it is facing the worst liquidity crunch in its history.
It has appealed to the newly-elected government for a bail-out of around Rs40bn in fresh equity and soft loans, but the Congress-led administration has its own financial worries stemming from a soaring fiscal deficit and the expectations of its constituents for expanded social welfare schemes.
Reflecting the severity of Air India's woes, Mr Jadhav last week asked about 150 of the carrier's top executives voluntarily to forgo salaries and other benefits for the month of July, and announced that June pay for staffers would be delayed by two weeks - from July 1 until July 15.
But analysts say that the airline will require more serious measures to nurse it back to health, and calls for its partial privatisation are mounting.
23/06/09 Amy Kazmin/Financial Times

To Read the News in full at Source, Click the Headline

Categories: NACIL Jun 2009