Cost-wary ministries want cheaper air fare for CPSE members

In a bid to cut costs, the ministries of coal, power, new and renewable energy, and petroleum and natural gas are firming up strategies that include negotiating with airlines for cheaper air fare for members of CPSEs.

"The estimated expenditure incurred on air travel by members of CPSEs (143 institutions, including 30 CPSEs) during 2014-15 was to the tune of Rs 270 crore," said Rakesh Kumar, Director (Finance), NLC India.

"Based on the volume, airlines have offered discounts on the market price of air tickets up to 22 per cent in various categories. It is anticipated that... The savings could be in the range of 8-10 per cent on air travel spend," he said.

 

The Energy PSU Task Force (EPTF) was constituted in March 2016 through consolidation and demand management in central public sector enterprises (CPSEs) under the ministry of power, coal, new and renewable energy and petroleum and natural gas.

As a pilot project, air travel spending has been taken up initially. An MoU has been signed by EPTF to this effect, Kumar said. The latest agreement was struck with Air India on September 27 after detailed deliberations with Air India CMD Ashwani Lohani.

Prior to this, some CPSEs had entered into separate agreements with airlines and had been getting discounts based on volume of business and negotiations.

Through the "bigger buyer" approach, airlines are encouraged to offer much better discounts and provide other facilities and add-on benefits.