Air India plans to revamp fleet, change hiring patterns

Mumbai/New Delhi | Updated on July 19, 2011 Published on July 04, 2011

Cost cutting: Cabin crew to recruited on contractual basis

In a bid to cut its expenses, Air India plans to re-organise its fleet and shift some of its aircraft to its subsidiary Alliance Air.

The airline is also hiring cabin crew on a contractual basis through its subsidiary Air India Charters Ltd. This is likely to help trim the airlines wage bill which is about 35 per cent of its total costs.

“Air India has some Airbus A-320s and Airbus A-330s which are more than 15 years old. There is a proposal in place to shift these aircraft to Alliance Air. But this might take some more time,” an Air India official told Business Line.

Alliance Air at present operates Boeing 737s, ATR 42-320 and Bombardier CRJ-700s flying mainly in the Northern region. The addition of Airbus A330s from Air India would give the airline a longer range and more flexibility in terms of the routes it can fly.

The national carrier has already put out advertisements seeking pilots for A320s and A330s for Alliance Air.

Air India has also begun hiring cabin crew on a contractual basis through its subsidiary Air India Charters Ltd. Airline officials said that the move is expected to help in “huge” savings in cabin crew costs.

“We have been hiring cabin crew through Air India Charters Ltd since February. This has led to a substantial cost benefits for the airline,” said an airline official who did not wish to be identified.

The other advantage of hiring cabin crew through Air India Charters Ltd is that the airline can hire cabin crew on a contract for three years instead of hiring them on a permanent basis. This allows the airline the option of not renewing the contracts after three years if it does not need them, a move that helps trim wage costs.

The move will also have an impact on the functioning of the unions as cabin crew on Air India's pay rolls are permanent employees whereas the fresh inductees would be contractual employees.

“The airline will also get tax benefits as it will reduce its payroll costs by cutting down on regular employees. By hiring employees on contractual basis the airline will not need to pay for additional payroll taxes and benefits,” said a tax analyst.

For inexperienced cabin crew, salaries range between Rs 41,000 and Rs 50,000 a month while for those with experience it can go up to Rs 1 lakh a month. Air India has approximately 3,500 cabin crew on its staff, as per the last known figures. Its total wage bill is around Rs 3,700 crore.

Cabin Crew hiring for Boeing 787s

The airline has already put out advertisements inviting candidates for Boeing 777 and Boeing 787 cabin crew. The advertisements are under Air India Charters Ltd although the two varieties of Boeing aircraft for which cabin crew is being sought are operated by Air India.

Commenting on whether the airline has been intimated about the delivery schedule for the 27 Boeing 787 it has ordered, a senior Air India official said, “We haven't been notified as yet but the test flight taking place is a positive sign that delivery would start soon.”

The Boeing 787 took its first test flight to Asia on Sunday as All Nippon Airways of Japan gets ready to become the first airline to deploy the much awaited, Boeing 787 Dreamliner.

Air India is expected to start receiving the deliveries of the first of the B 787 from the fourth quarter of 2011, more than two years later than the original delivery schedule.


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Published on July 04, 2011
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