No more business class travel for Air India employees

In a bid to boost the revenue,Air India chairman & managing director Arvind Jadhav has curtailed all business class travel by all grades of its employees...

In a bid to boost the revenue,Air India chairman & managing director Arvind Jadhav has curtailed all business class travel by all grades of its employees with immediate effect.

The company is passing through a critical financial situation and to improve the passenger revenue in the business class/first class,it has been decided that with immediate effect,all categories of employees (serving or retired) and their families/dependents,including the undersigned,will travel only in economy class, said an official note issued by the Air India chief on Thursday. And to implement the decision,Jadhav is said to have himself travelled by the economy class on his way back from Hyderabad the very same day.

There is a certain belief in the market that a substantial part of the business class market has been unaffected by the ongoing recession and naturally were trying to corner them, said an Air India official who requested anonymity. Indian carriers which are expected to post losses of Rs 9,000 crore this fiscal are trying desperately to corner the premium class travel that would help them immensely increase the revenue.

There were instances on the Mumbai-Delhi route when paying business class passengers were shifted to other flights because Air India officials were occupying business class seats. It created a perception that business class seats were not available at Air India and thus we have lost passengers on that count, said an official.

However,some employees maintained that the cut was expected to create a negative impact on employee morale and many retired employees who served the airline during its heydays did not deserve this. Jadhav told The Indian Express that it was a question of survival and using business class seats for meeting the companys internal usage was not an option. There is no harm in using the economy class seats. Retrenching on routes that many private carriers are doing is a bigger demotivator, he said.

There is a need to tighten belts and send the message to the rank and file about the need to take such measures. Also the example has been set by the senior management, said Jitender Bhargava,executive director (corporate communications),Air India.

The carrier is also working on an 18-month programme on cutting costs to the tune of Rs 1,000 crore while making a case with the government seeking Rs 1,300 crore additional equity and soft-loans worth Rs 3,000 crore.

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While the company prepares to induct 30 new aircraft in FY 09-10,according to officials,more cost-cutting measures will be announced early next week. Of the 30 aircraft to be inducted this year,seven are Boeings and the remaining will be Airbus, said an Air India spokesperson.