Mounting losses at the debt-laden Air India, the government-controlled air carrier, recently prompted finance minister Arun Jaitley to favour disinvestment amid shrinking market share and bloating costs.
Even as the government is working on plans to privatise the loss-making airline, employees of Air India are coming forward to help the company cut its debt with suggestions that range from hilarious to ludicrous.
A cabin crew member said he is ready to forego two months salary, besides giving up flying allowance -- amounting to Rs 4 lakh pending since three years, layover allowance and special allowance when travelling abroad, a Business Standard report said.
The said member also factors in that this suggestion may not help: “I know this will not make much difference as an individual, but if this can encourage a small portion of the mammoth employee size, it will make a dent in the Rs 50,000 crore debt wall that holds us in this situation,” the report said quoting the member, who wrote a letter to Chairman & Managing Director (CMD) Ashwani Lohani.
However, the report says Air India's management may not be in a position to implement the suggestions as the company is a public-owned company and the salary payment is governed by the stipulated rules.
Some employees suggested that their transportation claims allowances be waived till the time company shows some improvement. A few others had unique suggestions like eliminating salad from in-flight menu, for instance. The reasoning was that most passengers do not prefer it and it adds to the cost.
Or this one: Cut the size of in-flight magazine Subh Yatra. The crew member who suggested this took the cue from IndiGo which he said started operations without an in-flight magazine and later started one whose size is 'minimal'.
National carrier in red
Air India's market share today is around 14 percent while debt is a whopping Rs 50,000 crore. To put it in perspective, the debt figure is 5.5 times that of private carrier Jet Airways' debt of Rs 7,223 crore and 16 times that of IndiGo's Rs 3,201 crore.
You now get an idea the gigantic size of the white elephant that Air India has become which the government is wrestling with.
In an indication of a sell-off of the loss-making entity, Union finance minister Arun Jaitley recently said, "In this country, if 87 or 86 percent flying can be handled by the private sector... then they can also do 100 percent."
According to Jaitley, of the total debt, around Rs 20,000-25,000 crore are related to aircraft valuation. "What to do with the remaining amount... Air India also has some assets," he said, even as he emphasised that the civil aviation ministry is making efforts to explore all the possibilities.
Air India, which is surviving on a Rs 30,000-crore bailout package spread over 10 years announced by the Manmohan Singh government in 2012, is working on ways to improve its financial position.
In 2015-16, the airline posted operational profit of Rs 105 crore on account of low fuel prices and increased passenger numbers. Last fiscal, the airline is estimated to have earned a total revenue of Rs 21,000 crore while passenger revenue stood at Rs 16,500 crore.
While rumours of the government selling stake in the national carrier have been doing the rounds, there has been no official word on the same. The Civil Aviation ministry has been maintaining that it wants the airline to survive. In the past also, there have been at least two significant attempts for disinvestment of Air India, but they failed.
Last week, Civil Aviation Minister Ashok Gajapathi Raju said Air India's books are "bad", and "business as usual" is not going to help it, but the government wants the airline to survive. He had also said the airline was grappling with "legacy" issues.
A recent report in Firstpost said Air India's revenue growth has largely been in single digits over the last six years. Only once did the company post a double digit growth of 21.2 percent - in 2013-14.
(With PTI inputs)
Published Date: Jun 20, 2017 11:26 am | Updated Date: Jun 20, 2017 11:39 am