With the crisis in Air India growing by the day as more details surface about the financial mess in the airline, the Prime Minister’s Office is learnt to have given the go-ahead for the airline to return all its leased planes as early as possible to cut costs. Air India currently has 45 leased planes in its fleet of 143 aircraft.

The PMO has also approved the recommendation of the committee headed by Cabinet Secretary K M Chandrasekhar that the airline must shut its offices in stations where they no longer operate. Air India has personnel posted in places like Rome, Vienna, Stockholm, Amsterdam among others where they used to operate but have stopped for some reason or the other.

The PMO, which has already asked the airline to submit a detailed restructuring plan within a month, wants milestones identified for 6, 12 and 18 months. Sources said the Prime Minister has given Civil Aviation Minister Praful Patel a free hand to take all steps needed to effect a turnaround in the airline.

Of late, the Ministry too has been surprised by the fact that the airline employs nearly 1,000 people to run its canteens. After the merger, there are as many as 43 Executive Directors in the airline and outflow towards productivity-linked incentives is quite a bit. The PMO, in fact, has asked the airline to examine its PLI scheme and link it to company performance.

The airline will no doubt manage to save a large amount of money if it returns leased planes but insiders said they would have to weigh the costs of ending a contract before time. While the airline may save operational costs on the planes, the owners will not give relief on the leasing amounts. Air India will have to enter into negotiations with leasing companies to get the best “exit deals”, said sources.

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