Monday, 19 January 2015

India's Loss-Making Flag Carrier Air India To Pare Costs By $227M

India’s state-owned carrier Air India announced Sunday that it will implement methods to cut costs by about 6 percent of its total outlays, or by 14 billion rupees ($227 million), in the next financial year. The move comes after the Indian government asked the loss-making airline to take measures to improve its financial condition.
As part of its cost-cutting measures, Air India reportedly said, in a statement on Sunday, that it would identify "surplus staff," freeze contractual hiring and discontinue flights which don’t meet fuel cost targets. These steps will help the airline reduce its variable spending of 140 billion rupees by one-tenth, Reuters reported. According to a Press Trust of India (PTI) report citing anonymous sources, Air India plans to move a little over half of its 22,500 staff to subsidiaries dealing with engineering and ground-handling services. This move is expected to generate significant savings for the airline in payroll costs.
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