Thursday, August 25, 2011

Air India rethink on free tickets to employees

 The government has formed a committee to look into Air India’s policy of giving tickets free or at a concession to certain categories of employees.
“In Air India, concessions are given even to distant family members of employees. We have to revisit several such issues. A committee has been appointed to look into the issue,” said V. Narayanasamy, minister of state in the PMO. The government will take appropriate steps after the committee submits its report.

“Air India offers free tickets to organisations and associations as part of advertising and sales promotion and also to individuals for claims arising out of complaints. All employees of Air India, including retired employees and their families, are also eligible for free and concessional passes of varying terms,” he said.
These tickets are offered under approved schemes. So, no revenue has been foregone. But in view of the mounting losses, Air India may relook the policy based on the recommendations of the committee, Narayanasamy said.
The airline’s accumulated debt of Rs 42,570 crore means the government needs to inject over Rs 6,500 crore annually just to keep the company in business.
The government has allocated a cumulative Rs 26,707 crore as Plan expenditure to the airline. The carrier is talking to banks to restructure its working capital debt of Rs 17,000 crore.
Narayanasamy said there were demands for including freedom fighters and their widows in the list of those getting concessions.
Currently, freedom fighters who were sentenced to Port Blair’s security prison at Andaman & Nicobar Islands and their widows get 100 per cent concession in Air India in the domestic sector.
According to the civil aviation ministry, Air India has taken various steps to cut losses such as rationalisation of routes, rescheduling or cancellation of future aircraft delivery, return of leased capacity and rationalisation of manpower and productivity-linked incentive.
“The turnaround committee, which includes representatives from senior management and unions, will look into all areas where reduction is possible and will align all operational and technical agreements to reflect present market conditions,” civil aviation minister Vayalar Ravi said in a written answer to the Lok Sabha.
The turnaround plan also envisages the induction of some tier-II cities in the ailing carrier’s flight schedule.
Source : PTI/The Telegraph.

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