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Friday, October 17, 2008

Air India seeks to cut costs by offering unpaid leave to workers

Air India, the state-owned carrier, yesterday admitted it was seeking to pare its workforce by up to 50 per cent, as state oil officials accused India's two biggest private airlines of defaulting on $21m in jet fuel bills.

In the latest reflection of the gravity of the crisis facing India's airline industry, Raghu Menon, chairman and managing director of Air India, said the company would allow 15,000 of its workers to apply to go on unpaid leave for a period of three to five years.

The carrier, which has about 145 aircraft, has almost 33,000 employees, giving it one of the highest staff-to-aircraft ratios of any airline. But the carrier is trying to slash its wage bill, as it faces an estimated $800m in losses in the current financial year. Of its 33,000 employees, about 18,000 are involved in essential operational areas, while another 15,000 hold office jobs.

Jet Airways, India's biggest and most established private carrier, this week began cutting 1,900 of its 13,000 workers to "save the company" in the face of declining passenger traffic and rising costs.

However, sacking workers from a state enterprise is a tougher proposition, given politicians' reluctance to tangle with powerful state labour unions.

Kapil Kaul, chief executive for the Centre for Asia Pacific Aviation, said: "The question of lay-offs in Air India is wishful thinking." He estimated that the state carrier is 50 per cent over-staffed.

Air India said no employees would be laid off or forced to go on leave.

"The company is looking at many means of cost-cutting, including a scheme whereby employees of the company - if they so choose to do so, on a purely voluntary basis - can avail of three to five years' leave," it said.

But Air India admitted that only a handful of its employees were likely to take up the invitation.

Air India's admission of its desire to cut staff comes amid tension in the government over how to help ailing air carriers, which are reeling from declining passenger traffic and rising costs.

Private carriers have called for a reduction in heavy taxes in jet fuel to help them survive the squeeze of declining traffic and higher costs. But Murli Deora, India's petroleum minister, said carriers should first clear their outstanding bills to state-owned oil companies. Mr Deora said Jet and Kingfisher, India's two biggest private carriers, owe a combined $21m to Indian Oil Corp.



Tuesday, December 11, 2007

Air India set to get Star Alliance tag on Dec 13

The announcement of Air India's induction into the Star Alliance, which has 17 airlines as members and one of the oldest and the largest airline alliances, is likely to be made on December 13 in Beijing.

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Wednesday, October 17, 2007

Air India in talks with Star Alliance to join group

Air India, the newly merged Indian national carrier, has began negotiating with Star Alliance to join the group.

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Thursday, October 11, 2007

Air India expected to unload 15 percent stake in IPO

State owned Air India will likely unload 15 percent of its equity in an initial public offer (IPO) when its merger with domestic counterpart Indian Airlines is completed, a report said.

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Monday, August 27, 2007

Indian airline merger becomes a reality

India last week cleared the final legal hurdle to merge state-owned airlines Air India and Indian Airlines into a single company called National Aviation Company of India Limited (NACIL). (page not found)

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Friday, August 17, 2007

Faulty business class seats cost Air India dear

Defective seats in its business class have cost state-run Air India dear as a consumer court has asked the international carrier to refund the airfare along with interest to a complaining passenger couple.

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Sunday, July 29, 2007

Air India May Buy 60 More Planes to Tap Travel Demand

Air India Ltd., which is already buying new planes to spruce up its fleet, plans to order another 60 aircraft to meet rising demand for air travel in the world's second-fastest growing major economy.

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Thursday, July 12, 2007

Air India to fly Mumbai-NY non-stop

Air India will introduce a daily, non-stop flight from New York's JFK International Airport to Mumbai from August 1.

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Monday, July 09, 2007

Air-India plans hub in Germany

After merging domestic carrier Indian Airlines with itself, state-owned airline Air-India is keen on creating a hub in Germany for wider international presence.

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Sunday, July 01, 2007

Air India set to join Star Alliance

According to sources, the state-run carrier Air-India is all set to join the Star Alliance in the coming few weeks.

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Tuesday, March 06, 2007

Air-India merger may end reign of maharaja mascot

The future of Air-India's iconic mascot, the Maharaja, is in jeopardy with the planned merger between India's two state run airlines. (page not found)

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Thursday, February 22, 2007

Decks cleared for Air India-Indian Airlines merger

The merging of Air India and Indian Airlines sets the stage for the creation of a mega airline that could take on the likes of Singapore Airlines and Emirates.

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