BUSINESS

Air India Wants Passengers To Eat And Read Less So The Airline Can Survive. Will It?

Desperate measures for desperate times.

12/06/2017 2:48 PM IST | Updated 12/06/2017 2:53 PM IST
Hindustan Times via Getty Images
Air India aircrafts are seen parked on the tarmac of the international airport in Mumbai.

This is not the first time that Air India is looking at desperate measures to survive. With a massive debt burden on its wings, employees of the national carrier have come up with some ideas to cut costs.

According to a Times Of India report, an employee has suggested that Air India remove salad from meals offered in the economy class on international flights and reduce the number of in-flight magazines. Fewer magazines would mean a lighter plane that will burn less fuel.

The ToI report quotes from an internal mail sent by a senior official to the airline's top management.

The official said in his mail that a cabin crew in-charge had suggested some cost-cutting moves. "One was that in international flights economy class, he found only 20% eating salad," the mail read. "He (the cabin crew) felt we must discontinue salad in economy class on international flights. He also felt that we must carry only around 25 copies of Shubh Yatra (AI's in-flight magazine) in a flight which can be kept in the magazine racks rather than on every seat to reduce weight."

Would these cost cutting measure be enough for the Maharaja to survive?

Maybe not.

The national carrier has a debt load of over ₹52,000 crore and by all indications the government has made up its mind to sell it.

Meanwhile, the NITI Aayog has said that the sale process will be "very, very difficult". It has proposed total privatisation of the national carrier in its report to the Prime Minister's Office. Arvind Panagariya, vice chairman of the government's top policy-making body, has cited the case of airlines such as British Airways, Japan Airlines, and Austrian Air, pointing out that in each instance, the respective governments sold their entire stake in the airlines without retaining any shareholding.

In fact, Civil Aviation Minister Ashok Gajapathi Raju has said that it would be difficult to find a 'bakra' to take over Air India.

With things looking none too bright for the airlines, cutting on salad and in-flight magazines might not make a big difference. Since 2012, Air India has been surviving on a ₹30,231-crore nine-year bailout programme. Over the years, it has accumulated losses of over ₹50,000 crore.

It has tried out some austerity measures, but apparently that hasn't helped much. Last year, in a strongly-worded circular, Air India Chairman and Managing Director Ashwani Lohani barred its officials from using luxury cabs while travelling within the country and asked them to put up only in crew hotels. They were warned of strict consequences if they didn't follow the order.

An year earlier, the national carrier had announced a slew of cost-cutting measures including plans to cut reimbursables by 10 percent and scrapping of posts. Air India had also decided to discontinue flying loss-making routes.

Despite the measures and the government's lifeline, losses mounted.

"Air Indians will rise like a Goliath and prove our detractors wrong. Friends, Let us all resolve to increase revenues and decrease costs in a war like manner. Together we will win," the senior official's mail to the management read.

It's a great thing that Air India is maintaining an optimistic attitude, but it probably needs to remember that the sky is the limit after all.

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