New Delhi, Jan 19 (IANS) In order to maintain a healthy balance sheet, state-owned passenger carrier Air India plans to cut its total expenses by Rs.1,400 crore in the coming financial year.
In a circular issued to all employees Sunday, the flag carrier plans to stop hiring all non-essential staff, curbing transfers, field visits and holding meetings and conferences in five star hotels.
The circular asked employees to return immediately from outstation assignments to save on hotel and other costs.
Employees have also been informed that nearly 10 percent of their reimbursement amounts will be deducted to let the airline remain afloat.
Wages owned on account of extra time will also be reduced.
No new vehicles, office machinery and non-essential items will be bought. Immediate sales of old computers and other items has been mandated.
"These steps will ensure fiscal discipline within the airlines. All these restrictions are imposed on everyone right from the chairman to the lower staff," a senior Air India official told IANS here.
"The airline will stand to benefit enormously from these initiatives. Not only costs born on account of travel, but hotel rents are expected to be reduced."
The airline has also been advised to use less space at major airports like Delhi and Mumbai to reduce rentals.
The staff has also been advised to curtail outstation travel, engineers have been asked to service aircraft at only major stations and airport managers are to identify extra manpower that can be asked to go.
Costs on account of promotional activities, freebies and entertainment allowances will also be reduced.
"The move has been initiated in consultation with the ministry and fits well with our turnaround plan," said the official in the know of the development.
The airline ended the last fiscal with a positive EBITDA (earnings before tax, interest, depreciation and amortization) of Rs.65 crore on the back of higher passenger revenue and yield as well as passenger numbers.
On April 12, 2012, the beleaguered flag carrier got a new lease of life when the government approved the turnaround and financial restructuring plans for Air India.
The multi-billion-dollar bailout came with stringent riders like on-time performance, maintaining healthy load factors and hiving-off maintenance, repair and overhaul as well as ground handling businesses.
The company is expected to make cash profits from 2018, but it will take time to earn net profit or the actual profit.
Air India borrowed Rs.21,412 crore to buy new aircraft and Rs.22,368 crore as working capital. Its current losses stand at Rs.22,000 crore.
A riot broke out on Monday after the death of a Dalit student in UP's Auraiya by beating up a tea
Prithvi Shaw had set his base price at Rs 75 lakh for the IPL 2025 mega auction. It was expected
Coronavirus infection cases have been a cause of concern in India for the last month. On Tuesday
Before IPL 2024, a big update is coming out regarding Mumbai Indians' star batsman Suryakumar Yad
Singapore firm commissions first power project in India
Hyderabad, March 2 (IANS) Singapore firm Sembcorp Industries's first power project in India has
IND vs SA: Will the Indian team be successful in drawing the series? Know the weather in Cape Town
The second test match between India and South Africa will start today on the grounds of Cape Town
The heat can show sharp frowns this year. In March itself, many states across the country are exp
The difficulties of Himachal Pradesh and Uttarakhand, which are facing devastation due to heavy r
After the murder of Tunisha Sharma, many twists and turns have come to the fore in this case. Rec
The Australian cricket team is known for its alertness and Pakistan for its aggressive approach.
