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AI plans cost management blitz, aims to save around Rs 500 cr
By Rohit Vaid
Copenhagen, Sep 18 (IANS) National passenger carrier Air India plans to “re-negotiate” its agreements with vendors and suppliers to save operational costs of up to Rs 500 crore ($780 million) within the shortest possible time period.
The ambitious short-term target to be achieved in 12-weeks time has been set by the company’s new Chairman and Managing Director, Rajiv Bansal.
“There is always scope to cut and manage costs. My focus is to manage cost but not by inconveniencing the passengers in anyway,” Bansal told IANS in an exclusive interaction soon after Air India’s inaugural New Delhi-Copenhagen non-stop flight landed here.
“Internally, we are looking to optimise our leases with our vendors and services providers … renegotiations might be needed to fully optimise our agreements,” he said.
The mega cost saving plan envisages at least “one major initiative per week” to be taken on expenditure optimisation.
The cost savings measures which have been identified range from anywhere between Rs 10 crore and a maximum of Rs 50 crore per year.
“We must continue to chip away at the cost factor… My approach is to take one important initiative a week in this regard. It may be for as low as Rs 10-20 crore,” Bansal explained.
“For example we will be looking for bulk discounts and re-negotiation of some international contracts on the back of prevailing low interest rates globally.”
“The idea is to take one initiative every week which brings savings in small amounts on yearly operating expenses.”
The central government, though busy in consultations over the privatisation prospects of the debt ridden airline has agreed to provide the initial support required for the savings initiative.
“We have floated a global RFP for short-term loans of about Rs3,000 crore. I am confident of getting these by the end of this month,” he said.
“The loans are government-backed and will help in settling dues of various vendors like oil companies and airport operators and this also gives a chance to make a final one-time settlement with some of the vendors.”
The savings emanating from the cost management programme will be on “operational expenditure” basis and will be recurring, thereby the actual amount saved might be much higher.
The plan assumes significance as the airline is currently under a massive debt of more than Rs 50,000 crore.
Loans and losses over the last 10-years have become one of the biggest obstacles to its financial viability, besides an ill-planned merger and the Union Cabinet’s subsequent “in-principle” approval to divest the government’s stake in Air India.
Consequently, a ministerial group on Alternative Mechanism was formed to look into the modalities of the divestment process. It is headed by Finance Minister Arun Jaitley.
The group has been mandated to guide the strategic divestment process and to decide on key issues such as treatment of AI’s debt and hiving-off of its assets.
However, in the face of an eventual divestment, Bansal added: “My mandate is to run the airline profitability and on commercial considerations. Apart from savings we are also aggressively looking for revenue optimisation, route rationalisation, better deployment of our assets and to add some new international routes in the short term.”
The central government had appointed the IAS officer as Air India’s Chairman and Managing Director late last month.
Besides his current responsibilities to Air India, he is also the Financial Advisor to the Petroleum & Natural Gas Ministry.
(Rohit Vaid is in Copenhagen at the invitation of Air India. He can be contacted at [email protected])
–IANS
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Dr. Abhishek Verma Dedicates a Shelter in Memory of His Mother, Veena Verma, at KGMU; Inaugurated by Daughter Nicolle Verma
World-renowned business tycoon Dr. Abhishek Verma has supported Foodman Vishal Singh’s Hunger-Free World mission. In memory of his mother, Late Veena Verma, who was a 3 term Rajya Sabha MP.
Dr. Verma dedicated a state-of-the-art free permanent shelter for the attendants of patients at KGMU Medical University, Lucknow, under the aegis of Vijay Shree Foundation. His daughter, Nicolle Verma, inaugurated the shelter.
During the event, Foodman Vishal Singh honored Nicolle Verma by presenting her with a memento. Mrs. Nidhi Sharma and Avantika Yadav, associated with the organization, welcomed her with garlands. Following this, Nicolle Verma distributed essential items to the attendants and also handed out fruits. She became emotional remembering her grandmother on her birth anniversary.
On this occasion, she also inaugurated the “Veena Verma Sevalaya” in memory of her grandmother, Veena Verma, to serve the attendants. She expressed, “I feel proud that my family is engaged in nation-building as well as social service. Today, in collaboration with Vijay Shree Foundation founder Foodman Vishal Singh Ji, I feel immensely proud to dedicate this shelter for the poor, helpless, and needy attendants of patients battling serious illnesses like cancer. I am honored to be associated with the Hunger-Free World Mission for humanity.”
Inspired by the continuous humanitarian service provided by Vijay Shree Foundation over the past 17 years, Nicolle Verma donated 10 lakh rupees to support the cause. The purpose of this donation is to ensure that services continue for the needy attendants of patients suffering from severe illnesses in hospitals, as facilitated by Foodman Vishal Singh.
It is noteworthy that Dr. Abhishek Verma’s family has a legacy of public and philanthropic service. They are helping millions to carry forward the values and service work of their parents. On the occasion of his mother’s birth anniversary, Dr. Abhishek Verma dedicated this state-of-the-art permanent shelter at Lucknow Medical College to serve the attendants of patients through the Vijay Shree Foundation.
Supporting Foodman Vishal Singh’s Hunger-Free World mission, Dr. Abhishek Verma assured that he would continually support keeping this flame of humanity alive. He also promised to assist in providing medicines to the helpless patients.
Continuing her grandmother’s legacy of service, Nicolle Verma personally served food to the needy patients and attendants. She said, “It is our good fortune to have received the joy of doing this noble work today through Foodman Vishal Singh. I have taken another step forward in carrying my family’s values and cooperation by joining hands with the Vijay Shree Foundation. My father taught me to serve and help the needy, and I feel happy when I bring a smile to someone’s face.”
On the birth anniversary of the late Veena Verma, the event organizer, Vijay Shree Foundation founder Foodman Vishal Singh, said, “We feel proud and happy that Dr. Abhishek Verma, a globally renowned business tycoon, has extended his support to uplift our country from the hunger index. Today, on his mother’s birth anniversary, he inaugurated a state-of-the-art permanent shelter at Lucknow Medical College, which will always be helpful for the needy attendants of patients. It is a pleasure for me and the organization to receive the affection of Mr. Verma.”
The event was attended by General Manager Verma Family Office Hemant Garg, Sonu Rajput, and the organization’s volunteers, including Sandeep Singh, Parmeshwar Ji, Prashant Rao Gautam, Balram Singh, Ramesh Chaudhary, Suman, Jeetu, Anil, Suraj, Vinay, Manish Bhadauria, Manas Mehrotra, Vivek, Apurv, Happy, and others.
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