15-May-2013 10:04 AM

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  • Flights not meeting variable costs need to be restructured or withdrawn to eliminate additional losses and point to point rather than multi-sector operations;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]