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AI told to start low-cost service
Published on 4 Jul. 2009 11:32 PM IST
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: Budget flyers could soon be spoilt for choice. Cash-strapped Air India has been asked to start low-cost domestic operations as part of its overall restructuring - and survival - strategy. Reeling under loan liabilities of Rs 15,000 crore, the airline has also been told to restructure loans with banks and other lenders. And to cut costs - 46 of its current fleet of 155 aircraft are being returned at the earliest. The man in the eye of the AI storm, aviation minister Praful Patel, on Friday said a plan is being worked out for AI revival that has just one important condition - employees’ wholehearted support to turn the airline around. “Despite all problems, we’ll turn around AI. That’s a challenge we accept,” said Patel. “AI must enter the domestic low cost segment. That’s where the growth is and is something that Jet and Kingfisher have already done. It’s upto the airline whether to use AI Express for that purpose or have something else. But the business model has to be redefined,” he said. TOI had first reported two weeks back that AI will be entering the domestic low-cost segment. Patel said he had earlier also asked AI management to begin domestic low cost flights but “now they have to do that”. Government sources said the decision to delay payment of June wages was just to send a signal to employees that it’s not business as usual at AI. The loss-ridden airline is now going to see a serious attempt to downsize its workforce for which a leave-without-pay scheme has already been launched and VRS could soon follow along with a leaner fleet size. To begin with, 46 leased aircraft are being returned. Facing flak from unions over decisions like AI-IA merger and acquisition of new aircraft, a senior ministry official said: “AI-IA had not got planes for about two decades and desperately needed new machines. Each employee must also feel why despite getting new planes, the airline is not able to attract passengers?”

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