Strike may derail Air India turnaround plan

Mumbai/ New Delhi: Losses incurred because of an ongoing strike of pilots may derail Air India’s hopes of turning profitable by 2014, as well as force the airline to delay the disbursement of salaries for April and some other payments, two of its executives said.
“Air India is incurring an estimated revenue loss of Rs. 15 crore per day as 90% of the domestic flights have been cancelled owing to the pilots strike,” said one of the executives. “The total revenue loss suffered as a result of the cancellations from 27 April to 3 May is around Rs. 100 crore.”
The strike by 840 pilots, who constitute nearly half the airline’s pilot workforce, is set to enter its 10th day on Friday. The pilots are demanding parity in wages and a Central Bureau of Investigation (CBI) inquiry into how the state-owned company ran up a debt of Rs. 36,000 crore in four years.
Air India expects ticket prices to fall in May because of a decline in forward bookings on account of passengers losing confidence in the national flag carrier, the executive said, requesting anonymity.
In addition, Air India will have to pay private carriers such as Jet Airways (India) Ltd and Kingfisher Airlines Ltd for accommodating its passengers who are left stranded by the strike.
“Apart from the loss of goodwill, there would also be costs associated with providing hotel accommodation to the stranded passengers in India and abroad due to the delays in operating the flights. Airport booking office collections have also dropped substantially as refunds are processed at airports for cancelled flights,” he said.
06/05/11 P.R. Sanjai/Live Mint

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Categories: Air India May 2011