Air India aims to achieve cost savings of 13 billion Indian rupees ($272 million) in the remaining six months of its fiscal year.
India's flag carrier is targeting cost savings in a number of areas, it says. From its operational restructuring alone Air India hopes to achieve cost savings of four billion Indian rupees.
"Air India is hopeful of rationalizing its manpower costs by four billion Indian rupees as part of its operational restructuring, which is imperative for the airline in today's global context when all airlines are suffering huge losses, shedding manpower and subjecting employees to pay cuts."
Cutting pay is proving challenging, however. Large numbers of the carrier's pilots have called in sick over the last four days to protest plans to reduce their performance linked incentives and flying-related allowances. This has forced Air India to cancel dozens of flights.
In a meeting with Air India head Arvind Jadhav, the company's pilots remained adamant that the carrier withdraw its plan to cut their incentives and allowances, and provide assurance that "no cut will be applied on their emoluments," says Air India.
"As this condition was unacceptable to the management, the meeting ended without any agreement and thereby affected the chances of an early return to (normal flight operations)".
Other areas where the carrier hopes to reduce costs in the next six months include aircraft material costs, fuel, the renegotiations of handling contracts with airports, the elimination of wasteful expenditure, rentals and other administrative costs, it adds.
Source: Air Transport Intelligence news
