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5-member body to suggest steps for Air India revival

January 03, 2013 16:41 IST

Air India aircraftA committee was set up on Thursday to suggest measures to lower the high costs of Air India's operations and improve utilisation of resources in line with best global practices to help the state-run carrier achieve the goals of its turnaround and financial restructuring plans.

A five-member committee, headed by IIM-Ahmedabad's Prof Ravindra H Dholakia, was set up by Civil Aviation Minister Ajit Singh after a review meeting of the ailing national carrier's functioning.

Though the panel has been given two months to submit its report, it has been asked to give interim recommendations without waiting for its final report so that these could be implemented by Air India immediately, an official spokesperson said.

With improvements in Air India's performance in recent months, the airline is likely to end this financial year with a positive cash flow or EBITDA positive.

EBITDA (earnings before interest, taxes, depreciation and amortisation) is an approximate measure of a company's operating cash flow.

Expressing concern over the projected net shortfall of Rs 404 crore (Rs 4.04 billion) a month, the minister had recently asked Air India to cut redundant costs and optimally utilise its resources to meet the annual financial projections envisaged in the Financial Restructuring Plan.

Other members of the committee are Prabhat Kumar, Joint Secretary in Ministry, Rajesh Agrawal, Director Finance of ICRISAT, S Mukherjee, former Director Commercial and Inflight Services of Air India and Nasir Ali, Joint MD of the airline.

It would go into the expenses, identify loopholes in the company's existing structure and functioning leading to wasteful expenditure and recommend measures to plug them.

The panel would analyse the utilisation of jet fuel which accounts for 40 per cent of its total costs, as well as the inventories of spare parts and suggest ways to optimise fuel usage and inventory management.

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