"There is no need to cut manpower size by reducing
jobs and sending people home," Civil Aviation Minister Praful Patel said
Sunday.
He also pledged further help to Air India as it struggles
to restructure its pricey debt and to pacify restive unions, which have staged
two debilitating strikes since September.
The government plans to offer guarantees to lenders to
encourage them to take on Air India's debt at lower interest rates.
Patel said the government - which handed over Rs.8
billion ($170 million) last fiscal year and pledged another Rs.12 billion ($255
million) this year - would consider further equity infusions if the carrier
continues to cut costs and improve revenues.
"The government stands committed to further
infusions of equity," he said.
Kapil Kaul, chief executive of the India unit of the
Center for Asia Pacific Aviation, an independent aviation research group, has
estimated that Air India has accumulated an unserviceable debt burden of about
$8 billion, and that its staff, which tops 30,000, is about twice as big as it
should be, costing the carrier $800 million a year.
Air India seems to be relying on natural attrition to
reduce head count.
Executives also hope that a return to growth in the
sector and spinning off new businesses - like cargo handling for third parties
- will keep its many employees busy.
Air traffic revenue for the April to June quarter
increased by Rs.6.4 billion ($136 million), with passenger revenues up 28
percent to Rs.5.5 billion ($117 million) and cargo revenues up 61 percent, to
Rs.920 million ($19.6 million). The airline said it served an average of 36,000
passengers a day during the quarter, up 18 percent from the year-ago period.
Its fuel bill rose 33 percent during the quarter, costing
Rs.4.9 billion ($104 million).
