New Delhi: A committee was set up
today to suggest measures to lower the high costs of Air India’s operations and
improve utilisation of resources in line with best global practices to help the
state-run carrier achieve the goals of its turnaround and financial restructuring
plans.
A five-member committee, headed by
IIM-Ahmedabad’s Prof Ravindra H Dholakia, was set up by Civil Aviation Minister
Ajit Singh after a review meeting of the ailing national carrier’s functioning.
Though the panel has been given two months to
submit its report, it has been asked to give interim recommendations without
waiting for its final report so that these could be implemented by Air India
immediately, an official spokesperson said.
With improvements in Air India’s performance in
recent months, the airline is likely to end this financial year with a positive
cash flow or EBITDA positive. EBITDA (earnings before interest, taxes,
depreciation and amortisation) is an approximate measure of a company’s
operating cash flow. Expressing concern over the projected net shortfall
of Rs 404 crore a month, the Minister had recently asked Air India to cut
redundant costs and optimally utilise its resources to meet the annual
financial projections envisaged in the Financial Restructuring Plan (FRP).
Other members of the committee are Prabhat
Kumar, Joint Secretary in Ministry, Rajesh Agrawal, Director Finance of
ICRISAT, S Mukherjee, former Director Commercial and Inflight Services of Air
India and Nasir Ali, Joint MD of the airline.
It would go into the expenses, identify
loopholes in the company’s existing structure and functioning leading to
wasteful expenditure and recommend measures to plug them. The panel would
analyse the utilisation of jet fuel which accounts for 40 per cent of its total
costs, as well as the inventories of spare parts and suggest ways to optimise
fuel usage and inventory management.
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