GoM tells AI: Cut losses to get funds

New Delhi: With a monthly cash loss of Rs 400 crore, the Pranab Mukherjee-headed group of ministers told ailing Air India to come up with a substantial cost-cutting and revenue enhancement plan before expecting any bailout. The sense of the GoM comprising of home and aviation ministers P Chidambaram and Praful Patel along with Planning Commission deputy chairman M S Ahluwalia was that “good money can’t be made to chase bad money or put in a bottomless pit”.
The aviation ministry planned to ask for close to Rs 5,000 crore for AI — Rs 200 crore as equity and Rs 3,000 crore for funding aircraft purchase. AI management made a presentation on their restructuring plan. But the top UPA ministers felt it needed to do more to both slash costs on all fronts, including wages, and raising revenue. Now the GoM expects to meet again in week to 10 days by when AI has to rework its plan.
“No decision has been taken yet. Government support will come if AI can come up with a credible cost-cutting plan. The unions and management must cooperate to work out a solution. We are also awaiting inputs from our consultants,” Patel said after the meeting. AI has not been able to make much headway on wage front as to end the recent pilot strike it had to put their salary reduction on hold. “Employees are much more belligerent now and wage negotiation has become tougher,” said top sources.
22/10/09 Times of India

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Categories: Indian Aviation- In General Oct 2009