The government on Wednesday made it clear to the Air India employees that unless they cut costs to the tune of Rs 800 crore, there would be no government help — in the form of equity infusion of Rs 5,000 crore — for the ailing airline. “The government’s support comes with a condition that we (Air India) will cut costs,” civil aviation minister Praful Patel said. The airline was looking to cut overall costs by Rs 3,000 crore and also looking at increasing revenues by Rs 2,000 crore, he said.

“We have to generate Rs 800 crore from employees’ costs and that is the only hurdle for the airline from getting the government’s help,” Patel told the union representatives at a meeting. “You have to do it any which way and I am flexible if you come up with alternative measures,” he told union leaders. Patel met leaders of over 14 employees unions from Air India who represent over 25,000 of the airline’s 31,000-strong workforce.

The meeting between the minister and employees representatives was a first after last month’s strike called by senior executive pilots on the issue of cuts in their performance linked incentives (PLIs), which had jeopardised the airline’s operations for five days.

At a press meet called later in the evening, the minister said that the airline was looking to cut costs by Rs 3,000 crore and also looking at increasing revenues by Rs 2,000 crore. “It is a well known fact that Air India’s load factor is less than other airlines and an increase of 6-7 per cent in load factor can lead to a substantial jump in revenues for which they (Air India) will have to improve their marketing and services," Patel said.

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