New Delhi, July 19: A comprehensive restructuring plan to retrieve Air India from the current financial mess is expected to be submitted to the Government this week. By July 25th,the airline’s management is scheduled to put before the Committee of Secretaries (headed by Cabinet Secretary K Chandrashekhar) a business plan to turn around the nationalcarrier.
This plan would mention specific steps AI would take over the next 24 months to cut costs and boost revenues, in a bid to elicit Government support in the form of equity.
According to reports, AI is already eyeing additional revenue generation to the tune of Rs 1800 crore over the next six months but this could not be confirmed.
The restructuring plan is expected to address several complex issues, including staff strength and performance linked incentives (PLIs), hiving off Strategic Business Units (SBUs) into separate profit centres, tweaking the mega aircraft shopping order and shutting down unprofitable routes and even conversion of some planes already in AI’s fleet to begin a domestic low fare service under the “Air India Express” brand name.
This plan could also bring forth names of eminent peoplebeing invited to the ‘International Advisory Board’ which would assist the Board of Directors.
On workforce reduction there appears to be no immediate clarity. Senior ministry officials aver that about 5,000 of theworkforce would automatically retire in the next five years. Also, with the SBU plan being reactivated, many could technically be off the airline’s books once the SBUs are hived off into separate subsidiaries.
At present, PLIs account for about 45 per cent of AI’s total salary payout – these would be completely rationalized and the airline would also look at large scale redeployment of staff to cut costs.
–Agencies