New Delhi: Air India is seeking an additional
equity of Rs 5,000 crore from the government as it promises to
squeeze its fleet size and reduce the wage bill of its
31,000-strong workforce.
The national carrier has suggested that the government
should inject Rs 5,000 crore of equity over a period of three
years from this fiscal, besides providing guarantee for low-
cost working capital loans from banks, official sources said
here.
The airline, which is starved of cash, has sought Rs
2,400 crore by the end of March next year, they said, adding
that the carrier would need Rs 3,000 crore every three years
to meet its expenditure obligations.
In a proposal presented to the Group of Ministers last
week, the airline said it could cut down the fleet-size from
the present 146 aircraft to 95 over the next two years by
introducing new planes to replace the aged and leased ones.
The GoM, which met under the chairmanship of Finance
Minister Pranab Mukherjee, made it clear to the ailing
national carrier that any assistance by the government should
be matched by the airline through cost-cutting and revenue
enhancement measures.
In a presentation to the GoM on its restructuring and
turnaround programme, AI CMD Arvind Jadhav said the carrier
would reduce costs by about Rs 3,000 crore and enhance
revenues by Rs 2,000 crore annually.
The cash-strapped carrier, which is estimated to post
losses to the tune of Rs 7,200 crore this fiscal, has proposed
several measures to rationalise manpower costs.
While it has spent Rs 839 crore in the first quarter
of the current financial year, it has projected spending the
same amount in the second quarter and cap it at Rs 650 crore
each in the last two quarters, the sources said.
Among the steps initiated by the carrier is the
introduction of leave without pay scheme, reduction in
overtime and rationalisation of contractual and casual
employees.
Regarding "right-sizing" of its fleet, the sources
said Air India was planning to sell off its three Boeing 777-
400s after the Haj operations, two Airbus A-310 cargo planes
next month and lease up to three Boeing 777-200 (LRs) and up
to four A-310 cargo aircraft.
It also plans to finalise the sale of five Boeing 737
-200s and four A-320s by early next year, the sources said.
All these moves are part of the overall plan to make
the fleet trim and packed with newly-inducted aircraft, they
added.
Bureau Report
First Published: Sunday, October 25, 2009, 13:35