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Nacil to cut incentives bill 70 per cent

October 23, 2009 02:48 IST
National Aviation Company Ltd, which runs Air India, aims at reducing its Productivity-Linked Incentive payments in the remaining period of this financial year by 70 per cent, from Rs 650 crore to Rs 191 crore. The airline has 30,505 employees and the wage bill is of over Rs 3,100 crore.

The loss-struck airline had also introduced a leave without pay scheme to cut its flab and has got 277 applications. It has accepted 69 and will accept 50 more soon.

However, earlier attempts to cut PLI ran into such stiff resistance that the moves had to be frozen. Yet, there were losses of Rs 7,200 crore on its books by the end of 2008-09 and it has operational losses. Total revenue in the July-September quarter was Rs 3,467 crore in comparison to the total expenditure of Rs 4,246, which includes Rs 542.03 crore as interest income paid to lenders.

The airline has massive cost saving plans during the remaining period of this financial year. It aims at saving Rs 111 crore per annum from rationalisation of menu, bar and cabin services of the airplanes and Rs 68 crore annually by renegotiating agreements with cabin crew.

Also, rationalistion of overlap operations of erstwhile Air India and Indian Airlines flights on common routes to West Asia and the East Asia will save Rs 47 crore by the financial year end. Unification of the call centres would lead to saving of Rs 9 crore over a period of three years.

The airline aims at saving Rs 62 crore on fuel cost and Rs 413 crore by the end of this financial year through capacity adjustments, which means increasing and decreasing seats in sectors according the demands.

A Group of Ministers headed by Finance Minister Pranab Mukherjee met on Wednesday to discuss infusion of funds in Air India and d the airline to cut cost aggressively and at the same time to erate revenue.

A Committee of Secretaries headed by Cabinet Secretary K M Chandrasekhar, formed to monitor the airline's revival on a monthly basis, had also asked the airline to cut cost aggressively.

Mihir Mishra
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