Government committee to suggest cost cuts for Air India

Singapore
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India's government has constituted a committee that will deliver recommendations to help cut costs, stop wastage and boost aircraft utilisation at Air India.

Air India is projected to reach a net loss of Indian rupees (Rs) 4 billion ($74 million) per month. Under the terms of a financial restructuring plan approved by India's cabinet, the carrier is supposed show positive earnings before interest, tax, depreciation and amortisation by the end of March.

The committee will be headed by economics lecturer Ravindra Dholakia and will also include Air India's joint managing director Nasir Ali, former Air India executive S Mukherjee, a representative from the ministry of civil aviation and an independent member.

It has been given nine terms of reference, which include examining ways to reduce spare parts inventories, identifying loopholes within the airline's structure that cause waste and reducing overseas office expenses. The committee will report back to civil aviation minister Ajit Singh within two months.

In 2012, the cash-strapped airline delayed salaries and incentive payments to some employees, forcing Singh to intervene and ensure that the Rs2.3 billion in owed salaries was paid in mid-November.