Air India's Maharaja to give up pomp, turn no frills airline

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New Delhi, March 29: While the aviation sector waits for the entry of foreign airlines like Air Asia, the national carrier Air India may become a no-frills low cost operator.

A five-member panel headed by IIM professor R H Dholakia has asked the national carrier to take cue from no-frill airline model and cut costs. This includes reducing 26,000-strong staff.

The Dholakia committee, set up in January to recommend measures to cut Air India's costs and increase savings, studied ways to reduce its daily operational loss of Rs 14 crore.

Among the 46 recommendations made by the panel include tax-free bonds of Rs 10,000 crore to enable it retire its high-cost debt. It has suggested scrapping of flights to economically unviable routes that do not recover the costs and save Rs 600 crore per year. Further, fuel efficiency measures could also result in a saving of Rs 400 crore.

The Dholakia panel also wants the 'zero commission' norm as per global practice and asked agents to charge a service fee from passengers.

The report was presented to Civil Aviation Minister Ajit Singh yesterday.

Scam in boarding passes

A man was arrested at the Kolkata airport today with 600 blank boarding passes of Air India, prompting the state-run airline to launch a probe into an alleged fraud in the LTC scheme for government employees.

The person, identified as Satyender Kumar Verma, was intercepted this morning at the Netaji Subhash Chandra Bose airport when he was about to board a Spicejet flight to Port Blair.

His hand baggage was scanned leading to the recovery of 600 blank AI boarding passes.

The airline suspects a modus operandi in which the blank boarding passes, like those in possession of Verma, were used by unauthorised agents to generate fake travel records for government employees eligible for Leave Travel
Concession (LTC) facility extended by the central government.

It is suspected that these agents, in connivance with the passengers, would initially book an Air India ticket to a popular holiday destination and then cancel it and get a ticket from another airline to the same destination.

Later, the agent would generate the blank boarding pass as a substitute for the LTC scheme for the passenger to claim reimbursement from the government, thereby resulting in a loss to the exchequer, they said. All this results in the passenger claiming LTC amount without travelling and the agent gets his commission.

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