NIFTY 50

Rising fuel prices force Air India to take austerity measures

Updated : June 28, 2018 06:34:44 IST

While the government tries to find a way to take the failed divestment of fund-starved Air India forward, the airline's management has now turned to cost-cutting measures to keep the national carrier operational.

In a letter to employees in June, the chairman and managing director, has outlined a series of measures, which can save up to Rs 25 crore this fiscal.

However, Air India unions have come out strongly in opposition of the move.

"Airlines world over have resorted to series of measures to cut costs and increase efficiencies. Air India is also going through severe cash crunch, and therefore, it's imperative to initiate measures to cut costs. Such measures are intended at promoting fiscal discipline, without restricting the operational efficiency of the company," said Pradeep Singh Kharola, CMD, Air India, in a letter to the employees.

Cost-Cutting Measures
  • Cabin crew members of Air India will share hotel rooms and will be put up at three-star and four-star hotels instead of the five-star ones.
  • Airline encouraged staff to use autos and metro services available.
  • Staff leaving late will get auto fare instead of cab fare.
  • Purchasing or leasing of new vehicles will be put on on hold.
  • 10 percent cut in the dearness allowance as far as foreign tours are concerned.
National carrier, Air India, has about 3,000 cabin crew, of which 1,400 are permanent employees when the rest are on contract.
cnbc two logos
To keep watching CNBC-TV18, India's No. 1 English Business News Channel, call your Cable or DTH Operator and subscribe now for just Rs. 4 per month. You can also subscribe to CNBC-TV18 Prime HD for Re 1/- per month.Find out more
Live TV

recommended for you