It’s no secret that Air India’s financial performance has been really bad for many years. The embattled State-run airline is laden with debt and attempts by the Modi government to offload the carrier onto a private investor had to be abandoned earlier this year when not one single expression of interest was received.
As it stands, the Indian government is still working to secure yet another capital injection to keep Air India flying – officials said they would be able to pump $120 million USD into the airline, although Air India claims it needs at least $292 million in additional equity to pay off vendors.
With figures like that, it comes as no surprise that Air India is attempting to slash costs – a task which is easier said than done in India’s ruthless aviation market where the majority of airlines of making losses hand over foot. The country’s airlines are forecast to lose something in the region of $1.9 billion this year alone – in part because of intense competition and steep taxes.
With a balance sheet as precarious as Air India’s, it makes sense that the airline is looking at every aspect of its operation in an attempt to keep costs down – including its flight attendants who have often been perceived as being pampered.
According to India’s Economic Times, the airline has decided that flight attendants will now have to share hotel rooms on international layovers from now on. And if that wasn’t bad enough, the carrier will also abandon contracts with Four or Five-star hotels, in favour of simpler Three-star properties.
On top of that, Air India has introduced a whole raft of other measures to increase employee efficiency:
- Reporting late for an international flight will result in flight attendants being rostered only on domestic sectors for a full 12-months.
- Flight attendants who want to work on international flights will have to relocate to the airline’s Dehli base.
- A strict ban on upgrading friends and relatives once the aircraft doors are shut – with the threat of dismissal if the behaviour continues.
Apparently, a new strategy to turnaround the ailing airline will be announced soon – one of which will look at improving the “quality and skills” of the airline’s workforce. Although, management might have an uphill battle to improve morale and efficiency in light of these drastic cutbacks.
Elsewhere, India’s Jet Airways is facing its own problems, with reports that flight attendants and other staffers aren’t receiving paychecks on time and a decision to ground several aircraft in an attempt to shore up costs.
For all intents and purposes, India’s aviation sector is booming but making money is quite a different story.