Air India to cut cost amid industry turbulence
The Indian airliner has announced plans to slash staff and cut costly routes amid increasing pressure from cut-rate competitors. The move comes as the company eyes a possible turn-around after a long spell of losses.
India's state-owned aviation giant Air India announced late on Sunday that it plans to cut costs by 14 billion rupees (195 million euros, $227 million), or about 6 percent of its total outlays, in the next financial year. The announcement comes after the government asked the loss-making carrier to improve its fiscal health. The airline said that it would identify "surplus staff," freeze contractual hiring and discontinue loss-making routes, in a move meant to reduce its variable spending of 140 billion rupees by a tenth. "The ministry of civil aviation has directed that a 10 percent cut must be imposed," the company's chairman and managing director Robit Nandan said in a circular to senior staff. The company has also restricted staff travel, while pilots and cabin crew must stay in hotels near airports to cut transport costs. In addition, the circular said, "wage increases for local staff... will not be entertained." Stiff competition The move comes as Air India faces cut-throat competition from cheaper, private-sector rivals. The country's former aviation monopoly now controls just a fifth of the domestic market and hasn't turned an annual profit since 2007. In 2012, the government handed the flat-lining carrier a 300-billion-rupee bailout package, which was to be administered over a nine-year period, despite opposition from several ministers. The state run airline has reduced its losses over the last two fiscal years, with total year-on-year revenue rising by 6.5 percent in December 2014. All but one of India's major carriers have seen earnings nosedive, due to high operation costs and some of the lowest fare prices in the world. pad/uhe (AFP, PTI, Reuters)
Air India
Air_India Air_India_F.C. Air_India_Flight_182 All_India_Radio List_of_Air_India_destinations Tata_Airlines
Indian
India
India India_national_cricket_team British_Raj India_national_football_team Presidencies_and_provinces_of_British_India India_women's_national_cricket_team Indian_poetry A1_Team_India Indian_subcontinent History_of_India India_men's_national_field_hockey_team Dominion_of_India Elections_in_India Cinema_of_India La_India India_Davis_Cup_team
state-owned aviation giant
Air India
Air_India Air_India_F.C. Air_India_Flight_182 All_India_Radio List_of_Air_India_destinations Tata_Airlines
Sunday
14 billion rupees
195 million euros
$227 million
140 billion rupees
chairman
managing director
Robit Nandan
Air India
Air_India Air_India_F.C. Air_India_Flight_182 All_India_Radio List_of_Air_India_destinations Tata_Airlines
2007
2012
300-billion-rupee
December 2014
India
India India_national_cricket_team British_Raj India_national_football_team Presidencies_and_provinces_of_British_India India_women's_national_cricket_team Indian_poetry A1_Team_India Indian_subcontinent History_of_India India_men's_national_field_hockey_team Dominion_of_India Elections_in_India Cinema_of_India La_India India_Davis_Cup_team
pad/uhe (AFP, PTI, Reuters)
Air India
Air_India
iptc::20000170 sector::20000338 slot::keyword topic::business type::company type::entity type::organization
Robit Nandan
gender::male iptc::20000170 slot::keyword topic::business type::entity type::manager type::person
Indian
topic::none type::gpe0-x type::other
India
India
topic::none type::entity type::gpe type::gpe0 type::location
state-owned aviation giant
topic::none type::role type::value
Sunday
topic::none type::time type::value
14 billion rupees
topic::none type::money type::value
195 million euros
topic::none type::money type::value
$227 million
topic::none type::money type::value
140 billion rupees
topic::none type::money type::value
chairman
topic::none type::role type::value
managing director
topic::none type::role type::value
2007
topic::none type::time type::value
2012
topic::none type::time type::value
300-billion-rupee
topic::none type::money type::value
December 2014
topic::none type::time type::value
pad/uhe (AFP, PTI, Reuters)
topic::none type::footer type::other