India on Wednesday asked its loss-making national carrier to cut costs and warned the government would recruit new directors for the board of Air India to help its revival. The comments came after a newspaper reported that the state-run airline was planning to seek a 150-billion-rupee (three-billion-dollar) bailout package to cope with its cash crunch.
"There is a lot of excess flab on the entire body of Air India and it does not only mean manpower but also it means various cost cutting measures that have to be looked at comprehensively," Civil Aviation Minister Praful Patil told reporters in New Delhi.
"Air India must shape up. It should become leaner and trimmer." Patil met Prime Minister Manmohan Singh to discuss the fate of the national carrier, which on Monday said it planned to slash staff costs by more than 15 percent. Air India said it was aiming for a reduction of more than 100 million dollars in annual employee salaries, from the 625 million dollars it currently spends. Patil said Air India has to do more.
"The prime minister said 'Air India is (the) pride of the country and that we should do whatever is possible' but again with a rider that Air India also rises to the occasion and puts its best foot forward," Patil told reporters. "We will be strengthening Air India's board with directors of repute from various fields and we are also going to look at the restructuring of the top management of the airline," the civil aviation minister said.