AI, which was the first public sector unit (PSU) to bring down the age limitfor retirement from 60 to 58 years in May 1999, has since seen a reductionin manpower of around 1,500. This has reflected in the reduction of the wagebill by close to Rs 90 crore, Air-India director Jitendra Bharagava told TheFinancial Express.

AI, which accounted for a total manpower strength of 18,900 in May 1999, hasbrought down its tally to 17,400 to-date. With an average 25-30 personsretiring every month, AI is estimated to save up to Rs 25 crore per annum.

In addition to the natural attrition, AI had come up with a sabbatical leavefor employees in the non-operational areas (other than pilots, cabin-crewand maintenance) in October 1999, for either a two year leave or a three-dayweek.

This, too, was successful with 400 employees opting for it then and are nowseeking extension for which AI is positively looking into, Mr Bhargavasaid.

AI, in 1999-00, had posted a turnover of Rs 4,448 crore and the wage billaccounted for around 21 per cent of it. Mr Bhargava is optimistic thatdowntrend in the fuel prices since December, may enable AI to show anoperating surplus for the second consecutive year, though the decline in ATFis yet to percolate.

The ATF, which was the biggest constituent to the cost factor after manpowerin the past years, saw the fuel prices spiral to a ten year peak of Rs 64per US gallon. This is likely to add to the burden by around Rs 150 crore onaccount of increase in fuel prices. This has pushed manpower cost to theairline to the second position, with ATF cost becoming the number oneexpenditure factor.

AI is likely to post a decline in passenger load factor on account of theincrease in international airlines being airlines being permitted toundertake additional flights during peak season. AI, which enjoyed apassenger load factor of 66.9 per cent during 1998-99, improved it to 70.3per cent in 1999-00, and to 73 per cent during 2000-01.

...may ink pact with Malaysian Airlines
AIR-India, which currently has a code-sharing arrangement with around 11airlines, is likely to ink a pact with Malaysian Airlines. AI, on its own,currently flies thrice a week. Code-sharing arrangements contribute aroundthree per cent to the total turnover. When asked, AI director JitendraBhargava said: "Code-sharing arrangement is the next best option thandeploying your own aircraft which would help AI develop the market."

AI, as a prudent corporate policy, had earlier decided not to start newflights on routes with less than three services. This paves the way forcode-sharing since AI accounts for bilateral flying rights which could notbe encashed due to stagnancy in fleet expansion.