MUMBAI, Nov 6: After having accumulated a loss of nearly Rs 60 crore in the first half of the current financial year, Air India is now charting a restructuring plan, prepared by merchant bankers I-Sec. Its strategy includes putting on hold all fleet expansion plans, and a massive exercise to pare costs which also involves doing away with fare discounting.The airline has already hiked fares by 10 per cent under its winter schedule. As per the restructuring plan, Air India will not renew the wet lease on two of its Airbus A310 aircraft which is scheduled to expire this year on December 31. This, officials say, will save the airline about Rs 140 crore every year.According to J Bhargava, Director, AI, the airline is enhancing its capacity by flying its other 29 aircraft for longer hours. Its eight A310s will fly an average of 10 hours daily, up from 8.9 hours in the past.Other cost-cutting measures include freezing new debt issues and hiving off surplus real estate in New Delhi. ``We are rationalising the use of space. Offices which do not really need to function from the city will be shifted to the airport where we have our own premises,'' he said.The I-Sec report will be supplemented by the Vijay Kelkar committee appointed by the Government of India to study the airline's working. The committee, which starts work next week, has done a similar study on Indian Airlines - which, in turn, is only gathering dust.In an effort to cut down on the airline's expenditure, some pilots have decided to take a salary cut. In a recent circular, Director (Operations) R Mohan pointed out that 14 pilots had agreed to a five per cent pay cut as part of their contribution. Michael Mascarenhas, the airline's new Managing Director himself agreed to a ten per cent cut in his pay. Meanwhile, Mohan is trying to rope in more volunteers from his department to part with a slice of their salary. Several other departmental heads are also considering a voluntary pay cut to tide over the crisis, say sources.Besides the survival of the airline, at stake is the reputation of Mascarenhas, who took over in August from Brijesh Kumar, an IAS officer of the Uttar Pradesh cadre.It was during Kumar's tenure that the airline started making huge losses and ended the fiscal 1997 with a total loss of Rs 280 crore.Between 1995 and June this year, the airline has toted up a total loss of Rs 620 crore.Though AI officials say the on-going restructuring will enable the airline to turn the corner by the end of the current fiscal year, analysts are sceptical.The airline, once a jewel among the Indian public sector companies, slipped into coma due to increasing interference from New Delhi and lack of vision among its management. In the last few years, the airline's market share in outbound traffic dropped consistently and is now a meagre 19 per cent.
