Poor HR management cost Air India Rs 17 crore, says CAG

Air India may be looking at the government for more money for a “turnaround” but it seems the financially troubled national carrier cannot stop finding ways for wasteful expenditure.

Faulty human resources management at Delhi, which was developed as AI’s hub in November 2010, has cost the company an extra Rs 17.17 crore. The loss happened during 2011-12 and 2012-13, the CAG report tabled in Parliament last week has said.

“This was possible to have been corrected by the company through suitable human resource measures. This assumes greater importance in view of the present financial difficulties being faced by the company and emphasis laid by the government on rationalisation of costs for a turnaround,” it said.

The airline has to maintain a required strength of cabin crew at Delhi and Mumbai to operate international flights. With Delhi becoming its hub, Air India had to increase the number of crew in Delhi for smooth operations. Sixty-seven per cent of international flights originated from Mumbai prior to the declaration of Delhi as its hub but it came down to 48 per cent after November 2010.

Crew movement

The services from Delhi rose from 33 per cent in October 2010 to 54 per cent in March 2013 but the crew maintained at Delhi did not increase to the extent required over the same period. This “necessitated” crew movement from Mumbai to Delhi.

“The Mumbai-based crew travelled as Staff on Duty (SOD) to Delhi one day before flight duty, stayed in a hotel to provide one clear night and operated the flight the following day, incurring additional expenditure. Following completion of duty, the crew either returned to Mumbai the same day or after a stay in Delhi for one or two days which added to the deadhead cost,” the CAG found.

A scrutiny showed that AI’s Mumbai-based crew undertook SOD travel of 64,795 flying hours in the two years under audit. Besides, the allowances to the crew and other expenditure related to their stay, the CAG said the airline lost money as seats on which the crew travelled were not available for passengers on a busy route like Mumbai-Delhi.

New Dreamliners

In another instance of poor resource management, the CAG said 42 per cent of trained crew for newly inducted Dreamliners were from Mumbai when all the services were from Mumbai.

Defending itself, Air India said it could not transfer personnel to Delhi in the absence of a “clear transfer policy”, which is being worked out. It also said that deadhead cost was common and conforms to regulations and it was neither “feasible nor economical” to have bases at many locations to curtail deadhead cost.

However, the CAG was not impressed with the airline and said this situation was avoidable though some deadhead cost would have occurred anyway.