Sunday, October 22, 2017

Air India may renegotiate contracts with key vendors

Mumbai: The loss-making Air India is likely to relook into some existing key contracts with its suppliers, including aircraft lessors and engine makers, as it seeks to trim costs ahead of stake sale by the government.

Air India chief Rajiv Bansal, who has been working on ways to improve the airline's on time performance (OTP) and prune costs on various fronts, has set up a task force comprising four teams to put together a strategy before engaging with vendors, according to a source.

"The task force for contract negotiations has been asked to identify team members to negotiate and right-spec key contracts with engine supplier GE, aircraft lessors, global (ticket) distribution system (GDS) and catering services providers," the source said.
Bansal, a senior IAS officer, took charge as the interim Chairman and Managing Director of the state-run airline in August.
Terming "cost consciousness" as one of the core areas for improving the financial health of the debt-ridden airline, Bansal had recently urged his workforce to ensure that not even a single 'paisa' is wasted for a better future.
According to the source, HR Jagannath, who is heading the airline's engineering subsidiary AIESL, will lead a team that will relook into the contracts with GE, while Air India's director for finance, Vinod Hejmadi, will head the team to negotiate with the aircraft lessors.
22/10/17 PTI/Economic Times