New Delhi: Taking a cue from Prime Minister Manmohan Singh's call on austerity, India's largest airline Air India is contemplating a slew of cost-cutting measures aimed at overcoming mounting losses to the tune of Rs 1,500 crore.
Several austerity measures are believed to have been discussed by the management in a recently-held Board meeting.
Surging aviation fuel prices have also forced Air India and some other airlines to tighten their belt. The cost-cutting is likely to include a 25-pc cut in wages and incentives, a 25 pc cut in fuel reimbursement, driver salary and car maintenance.
Clothing allowance may be also discontinued and the budget for sales promotion is also likely to be hacked by 25 per cent.
A report on these measures has been forwarded to Civil Aviation Minister, Praful Patel.
Patel would meet Prime Minister Manmohan Singh on June 10 to find ways to prevent the crisis, which is taking a toll on the aviation industry.
Patel, who has expressed serious concern over the health of the industry, is joined by industry leaders, Jet Airways Chairman Naresh Goyal and Kingfisher Airlines' Vijay Mallya, in raising concerns over the "crisis" situation, which industry experts feel could see some airlines going bust, like in the early 1990s.
Fearing such a situation, Patel has said, he would raise the concerns expressed by the airline industry. He is likely to make a presentation to the Prime Minister and Finance Minister P Chidambaram about the difficulties being faced by the aviation industry.
Some airline chiefs are also expected to join the meeting.
The meeting comes in the backdrop of several airlines trying their best to curtail costs. Some of them are even contemplating pruning their services, delaying their fleet induction plans or even grounding some of their aircraft, experts said.
The airlines are also in a fix as they could not pass on the entire burden of fuel price hike to the travellers, as this would eat into their market share.
(With inputs from Karma Paljor and PTI)
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