Infuse more funds into Air India but with conditions: CAGSeptember 8th, 2011 - 6:49 pm ICT by IANS
New Delhi, Sep 8 (IANS) The official auditor in its report on flag-carrier Air India tabled in parliament Thursday asked the government to consider further equity infusion into the airline if the airline agreed to re-haul its operations and cut costs.
“The government should consider prompt infusion of additional equity in a timely fashion. However, such infusion has to be linked to a package which the company must accept in advance,” the Comptroller and Auditor General (CAG) said in its report.
According to the CAG, the conditions for more funds should include restricting the incentives offered to employees, rethink on proposed purchase of additional aircraft, rationalisation of routes and cutting down on staff posted abroad where the airline does not fly.
“All free travel by AI officers in business or first class should be prohibited. All existing facilities offered in this regard should be withdrawn till AI’s financial conditions improve,” according to the recommendations the auditor made to stem losses at the carrier.
“Accountability in the airline, its board, government nominated directors and the MOCA has to be clearly established and transparently dealt with,” it added.
It also suggested senior officials such as general managers should personally supervise operations and take feedback from passengers about service and operations.
“Unless senior officers are available on site and round-the-clock basis to obtain feedback on operations, significant improvements in performance are unlikely to take place.”
The CAG further recommended that an assessment be carried on all routes operated by the airline.
“A critical assessment of the airlines profitability sectors, if any, is required. On other sectors, attempt to remove infirmities including bilateral (agreements) to support the airline may be made,” the report said.
The report also recommended that the company should employ latest information technology tools to cut cost via e-ticking and deploy a revenue management system for real-time ticket pricing based on market conditions.
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