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Mumbai, MAY 8 (Agencies):
CAG report slams Air India for mismanagement
Published on 8 May. 2011 10:22 PM IST
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Just days after the Air India pilots strike, it looks like there’s more trouble for the airline. A CAG report now has slammed the airline for mismanagement and incurring huge losses at its jet engine overhaul workshop.
From buying aircraft and employing people it can’t sustain, stories of mismanagement and over-expenditure in debt-strapped Air India don’t seem to end. A new CAG report with CNN-IBN slams Air India for ‘wasteful expenditure’, ‘inefficiency’, and ‘excessive delays’ in repairing and overhauling its fleet’s engines, resulting in huge losses for the airline.
The report, that pertains to the functioning of Air India’s jet engine workshop in Delhi points out that despite having in-house capability, the company sent 41 engines and engine parts to outside agencies for repair, incurring an expenditure of Rs 498.66 crore.
It also says that the workshop was under-utilized, removing more engines than it repaired, resulting in 1-11 aircraft being grounded for over 3.5 years. The grounded aircraft resulted in a revenue loss of approximately Rs 291 crore rupees.
The company modified all its engines to a particular specification at a cost of Rs 67 crore, a modification that was found to be unnecessary.
The report also slammed the airline for labour inefficiencies staff at the engine shop that took 55 per cent more time to complete work orders in a four year period, losing almost Rs 11 crore on excess labour costs.
The CAG report goes on to say that the management’s replies to some of these findings are ‘unacceptable’, though, in large part, the management has just accepted many of these findings. As reports of mismanagement like these continue to surface, it appears the latest pilot strike won’t be the last of this beleaguered airline’s woes.

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