MPs’ panel picks holes in AI’s cost-cutting plan

New Delhi: A day before the aviation ministry to seek funds from the Pranab Mukherjee-headed Group of Ministers for Air India, a Parliamentary Standing Committee on transport on Tuesday pointed out serious issues in the way the airline has been run so far, finding holes in the airline's cost-cutting move.
CPM leader Sitaram Yechury-led panel came down heavily on the airline's lease agreements, saying it went against AI's interests and also criticised Maharaja's inability to utilise its share of foreign flights. The airline management and top aviation ministry officials told the Standing Committee on Transport that it had returned five aircraft leased from Jordan. But the planes have not been accepted so far by the airline there as the agreement with AI stipulated that aircraft be returned exactly in the same condition with exactly the same parts that they were sent out with.
AI is learnt to have told the panel that's examining if the merger of AI and IA led to the current crisis.
What surprised the parliamentary panel even more was the fact that AI has over time stopped many profitable routes or changed their times that has benefited other airlines.
AI also gave a break-up of its total cost — fuel: 38%, others: 36%, wage bill: 18% and debt servicing: 8%. "The panel pointed out that AI's main focus seemed to be on wage bill without bothering about other heads," said sources. The panel also questioned how a large purchase order for 111 planes at almost Rs 50,000 was cleared?
21/10/09 Akshaya Mukul & Saurabh Sinha/Times of India

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

Categories: NACIL Oct 2009