Air India to implement 47 Dholakia Committee recommendations, USD91m in savings in next six months
India's Minister for Civil Aviation Shri Ajit Singh stated (14-May-2013) that the Government has accepted the recommendations of Prof Dholakia Committee Report on Cost Cutting in Air India and sent to Air India for immediate implementation. Mr Singh noted: "The Committee has made total 47 recommendations. Air India expects a saving of about 500 crores [USD91 million] in next 6 months by implementing some of the recommendations of the Committee". Air India has constituted a Committee comprising of the following to implement the recommendation of Cost Cutting Committee in a time-bound manner:
- Shri Nasir Ali, Joint Managing Director;
- Shri Deepak Brara, Commercial Director;
- Shri S. Venkat, Director Finance.
The main recommendation which Air India is going to implement is to evolve a model based on an ideal mix of best practices of LCC model while retaining the core features of full service carrier. The main recommendations are as follows:
- Charging for food in the domestic sector and rationalising it in the international sector;
- Unbundling of services to passengers and advertisement space;
- 0% commission and ticket booking through website;
- Shift from full MRO to preventive maintenance and power by the hour concept -technical & efficiency audit of engineering;
- Strict enforcement of simplified excess baggage charges;
- Dynamic pricing and passenger upgrade;
- Flights not meeting variable costs need to be restructured or withdrawn to eliminate additional losses and point to point rather than multi-sector operations;
- Idle aircraft to be used on most profitable sectors or surrendered; and underutilsed assets like luxury lounges, time slots at busy international airports, land, buildings, floors, hangar space and hotels to be leased out or sold;
- Surplus crew to be relocated as per crew pattern requirements and SOD movement curtailed;
- As per DPE instructions, no encashment of SL and lapsable PL - also at foreign stations;
- Temporary posting of employees should stop;
- Transport and hotels for pilots and crew and their layover pattern;
- Excessive and unjustified allowances to pilots and crew to be stopped;
- Extra reimbursements should be merged with allowances within limit of 50% of revised basic as per DPE guidelines; and training should be provided to those with more than three years of service left before retirement;
- Free or subsidised transport facility to be stopped and extra transport allowance over and above the normal transport allowance not to be provided;
- Canteen services at non-factory areas to be withdrawn and at factory areas to be outsourced with revised rates;
- Closure of 18 off-line stations and recall of IBOs;
- 14 Flight Despatchers plus 10 EMS-QMS staff to be hired.
- Strong accountability at all levels, efficiency audit and private investments in the long run. [more - original PR]