Air India
Air IndiaReuters

Amidst talks of privatization and large amount of losses, Air India has decided not to pay for lapsable Privilege Leaves to non-operational employees due to lack of funds.

The non-operational employees include staff and officers of the Commercial Department working in Sales and Marketing Offices, as well as Finance and Personnel employees in Operating Departments.

The lapsable Privilege Leave (PL) can now be encashed only by operational employees and others will be given leave for a month commencing from 1 July, a source told
International Business Times India Edition on condition of anonymity. The amount of PL is around ₹25,000 per employee, which the airline cannot afford due to financial crunch.

On the other hand, the carrier aims to spend on hiring additional cabin crew to improve the standards after joining Star Alliance group, reported the Economic Times. The proposal has reportedly been made by the airline's customer-service division, but no numbers have been presented before the human resource department yet. The debt ridden airline is taking additional measures to improve its services. 

"The menu will have more international content in it. We have hired the Oberoi to do catering for us for business and premium class. There is a customer service improvement programme which will be implemented from July 11," Rohit Nandan, chairman and managing director of AI, told Business Line.

The airline has been under heavy losses after merging with domestic carrier Indian Airlines. It has also faced trouble bearing fuel expenses and was even afflicted by overstaffing. Presently, Air India is trying to reduce fare prices for the peak travel season.

Last January, the salary of employees was reduced by 25 percent and the brand also eliminated several perks including cash against sick leaves.

Meanwhile, AI is said to be confident of gaining profits by 2018, though it is currently operating on a bailout funded by taxpayers' money, according to Hindustan Times. After becoming a part of Star Alliance group, the airline expects a 5 percent increase in revenue.

"From 2015-2016 onwards, the airline will drain up to $1 billion per annum from the public exchequer over the next decade with no meaningful improvement in the carrier's situation. A dramatically different approach is required to that which has been pursued in the past," according to a recent Centre for Asia Pacific Aviation (CAPA) report.

Air India's estimated total debt is ₹49,000 crore and total losses incurred from 2007-08 to 2013-14 is ₹37,996 crore. The expected losses in 2014-15 is ₹6,000 crore and now the government's estimated capital infusion into the airline is ₹30,231 crore by 2021, reports Hindustan Times.