Published on : Friday, May 31, 2019
Indian national carrier Air India, which has been struggling with cash flows, may soon join hands with the Ministry of Tourism for a working partnership overseas that includes shifting of tourist offices at eight overseas destinations to Air India offices.
Discussions for the partnership are on between the Ministry of Civil Aviation and the Ministry of Tourism. The move is part of cost restructuring by the Ministry of Tourism and will require it to shut offices at prime tourist destinations, like London, Paris, Amsterdam, Toronto, Tokyo, Sydney and Milan. As part of the arrangement, India Tourism will pay rent to Air India along with a nominal amount for the service rendered by the Air India staff.
India Tourism, that closed 15 such overseas offices, was asked by the government to bring down the number in two-three years and shift operations to the embassies in those cities.
But the tourism ministry argued that the embassies are better equipped to handle diplomatic relations while travel and tourism promotion related matters should be with India Tourism. The embassies also raised security concerns, saying that they cannot be opened to unlimited public access. “Since Air India has offices in prime locations in those cities, both functions can be handled from a single office and by the same workforce,” said a person aware of the development.
Air India reported a net loss of Rs 5,377.7 crore in the financial year 2017-18 and a total revenue of Rs 23,900.4 crore.
There was more than 10 per cent increase in the company’s total expenses, including a jump in fuel cost, at Rs 29,125.8 crore. After a failed attempt at selling the national carrier last year, the central government has re-started the process and is believed to have approached business houses.
A clear-cut business deal between India Tourism and Air India could also help in cleaning up the books of the state-owned air carrier before the Union government starts the process of the airline’s sale.