Panel asks finance ministry to examine AI aid package

New Delhi: A high-level government committee today directed the finance ministry to critically examine the “extent of assistance” to be given to cash strapped Air India.
The petroleum ministry has also been directed to extend the national carrier’s credit limit initially for three months. This was after the committee of secretaries, headed by the Cabinet secretary, Mr KM Chandrasekhar, met for the first time.
The committee, set up by the government to monitor Air India’s cost cutting measures, however, made it clear that any assistance from the government would have to be matched by an aggressive cost reduction and a better revenue management.
Air India’s parent company, National Aviation Company of India Limited (NACIL), was directed to come up with a concrete cost reduction proposal including replacement of the current productivity linked incentive (PLI) with an alternative scheme.
NACIL has also been asked to appoint a cost auditor to monitor costs. The auditor would ensure that cost reduction measures and operational efficiencies are implemented on a day-to-day basis.
The civil aviation ministry and SBI Caps made a presentation before the committee on cost reduction, operational efficiencies, revenue generation and need for financial restructuring.
Speaking to reporters after the meeting, Air India’s chairman and managing director, Mr Arvind Jadhav, said: “The government is with us and would give full backing to the airline on its growth and cost saving plans.” He said the focus of these plans was on revenue generation and the airline would keep the committee updated on these plans at its meetings to be held every month from now onwards.
25/07/09 The Statesman

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

Categories: NACIL Jul 2009