Panel studying AI's health submits report

A committee, which suggested measures to lower the high costs of Air India's operations and improve utilisation of its resources including manpower, submitted its report to civil aviation minister Ajit Singh on Thursday.

"The recommendations of this committee will have a far-reaching impact on the airline's financial health. It is a useful report, which could help implementation of Air India's Turnaround and Financial Restructuring Plans," Singh told reporters after accepting the report of the panel which has made 46 major recommendations. Asked how would these recommendations be implemented, he said, "We have to examine them in details... Most decisions will have to be taken by the Air India Board."

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The five-member committee, headed by IIM-Ahmedabad's Prof Ravindra H Dholakia, was set up in January after a review of the airline's functioning. It recommended steps to cut costs and increase savings in line with the best global practices. The experiences of foreign airlines like Japan Airlines (JAL), Malaysian Airlines and Garuda of Indonesia are understood to have been considered by the Committee while making the recommendations, Singh said. The report went into the structure of the company's expenses and identified loopholes which led to wasteful expenditure and recommended measures to plug them.

It examined issues relating to manpower utilisation as several foreign airlines, including JAL, have slashed the number of employees, besides taking other steps, to come out of the financial rut. The panel analysed the utilisation of jet fuel which accounts for 40 per cent of its total costs, as well as the inventory of spare parts and suggest ways to optimise fuel usage and inventory management.

With improvements in Air India's performance, the airline is likely to end this financial year with a positive cash flow or EBITDA (earnings before interest, taxes, depreciation and amortisation) positive, Singh said, adding "the whole culture of the airline is undergoing a change."

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