AI told to finalise cost-cutting plans linked to govt aid

The finance ministry put Air India on the mat on Sunday, terming Air India’s turnaround plan as “conservative”. The ministry presented before the committee of secretaries (CoS) stringent measures, which the loss-making national carrier needs to undertake in order to come out of the red.
The finance ministry told Air India that any government assistance would come with a string of riders. At the same time, the CoS has asked the carrier to prepare a proposal for consideration of the union cabinet on its turnaround plan and the financial assistance required. In the second meeting of CoS held on Saturday, chaired by cabinet secretary KM Chandrasekhar, the finance ministry presented a slew of measures to be undertaken in 10-15 key areas, where costs could be reduced drastically, a senior government official told The Indian Express. Further, the airline was asked to firm up negotiations and quantify each cost reduction measure, to which the assistance will be linked.
These areas include catering, route rationalisation, sales and lease agreements of aircraft and voluntary retirement scheme to shed flab of over 31,000 employees.
30/08/09 Smita Aggarwal/Indian Express

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Categories: NACIL Aug 2009