Ahead of privatisation, Air India to offer VRS to 15,000 employees
New Delhi: Air India is developing a proposal to offer voluntary withdrawals to just over a third of its 40,000 employees, two government officials said in one of the largest operations of its kind in the Indian state sector, as cuts Of airlines cost a sale in 2018.
The state-owned airline has also expanded the waiting fleet, dismantling a proposed lease of eight wide-body Boeing 787s, one official told an Air India executive who called for anonymity because the plans are not public. The Board of Directors of Air India approved the proposal in April, but nothing has been done.
“Nothing has been finalized, but our goal is to make the simplest possible strategic sale,” said the company official, adding that any new investment is also put on hold.
Air India spokesman Dhananjay Kumar said the company had not offered employees voluntary withdrawals.
The Indian flag bearer is on the block after Prime Minister Narendra Modi had last month approved plans to privatize the airline deficit with the sale of part or all of the company and ending with decades of support State.
Founded in 1930 and known for generations of Indians for its mascot Maharaja, Air India has a complex fleet of too many employees compared to competitors and 8.5 billion dollars in debt. Since 2012, New Delhi has injected 3.6 billion to keep it afloat.
An official of the Office of Modi said the prime minister, under pressure to reduce spending and increase basic infrastructure, such as ports and highways, “was not in the mood” to provide more monetary aid to any public deficit enterprise.
The two government sources, familiar with Air India’s plans, said the main civil aviation ministry and Air India officials were invited to submit a report on how a voluntary pension scheme (VRS) could be offered to 15 per 000 Air India 40,000 employees, including contractors.
Many businessmen, including office and field office managers, worked for the airline for years and should receive acquisition offers to avoid protests, said the company’s senior officer, who is involved in daily air operations.
Earlier attempts to unload the aircraft failed mainly because of the magnitude and complexity of Air India’s problems and its influential unions.
If Modi can call privatization, he will strengthen his powers as a brave enough reformer to work on some of the most difficult problems in the country.
Also on Tuesday, Air India President Ashwani Lohani sent a letter to employees who asserted that government and airline management “would save their genuine and valid interest,” according to a copy of the letter seen by Reuters. Kumar, the company spokesman, confirmed the letter.
The government will have to convince seven unions to accept the plan to make aerial attractive to potential buyers, including acquisitions and other efforts to cut costs. His initial response was not positive.
“The government will propose a VRS scheme and propose its proposal to us in the trash,” said JB Kadian, a union leader representing 8,000 non-technical Air India employees.