Air India revival plan coming up

New Delhi: A comprehensive restructuring plan to retrieve Air India from the current financial mess is expected to be submitted to the Government this week. By July 25th,the airline's management is scheduled to put before the Committee of Secretaries (headed by Cabinet Secretary K Chandrashekhar) a business plan to turn around the national carrier.
This plan would mention specific steps AI would take over the next 24 months to cut costs and boost revenues, in a bid to elicit Government support in the form of equity. According to reports, AI is already eyeing additional revenue generation to the tune of Rs 1800 crore over the next six months but this could not be confirmed.
The restructuring plan is expected to address several complex issues, including staff strength and performance linked incentives (PLIs), hiving off Strategic Business Units (SBUs) into separate profit centres, tweaking the mega aircraft shopping order and shutting down unprofitable routes and even conversion of some planes already in AI's fleet to begin a domestic low fare service under the "Air India Express" brand name.
On workforce reduction there appears to be no immediate clarity. Senior ministry officials aver that about 5,000 of theworkforce would automatically retire in the next five years. Also, with the SBU plan being reactivated, many could technically be off the airline's books once the SBUs are hived off into separate subsidiaries.
19/07/09 Sindhu Bhattacharya/Daily News & Analysis

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Categories: NACIL Jul 2009