Air In­dia eyes bumper staff buy­out

Car­rier cuts costs, holds fleet ex­pan­sion ahead of pri­va­ti­za­tion

Kuwait Times - - BUSINESS -

Air In­dia is draw­ing up a pro­posal to of­fer vol­un­tary buy­outs to just over a third of its 40,000 em­ploy­ees, a se­nior com­pany of­fi­cial said, one of the largest such of­fers in In­dia’s state sec­tor, as the car­rier slashes costs ahead of a 2018 sale. The of­fi­cial, who could not be named as the plans are not pub­lic, said the state-owned air­line had also put fleet ex­pan­sion on hold, scrap­ping a pro­posal to lease eight Boe­ing 787 wide-body air­craft. Air In­dia’s board ap­proved the pro­posal in April but noth­ing fur­ther had been done. In­dia’s flag car­rier is on the block af­ter Prime Min­is­ter Naren­dra Modi’s cab­i­net last month ap­proved plans to pri­va­tize the loss-mak­ing air­line - sell­ing part or all of the com­pany and end­ing decades of state sup­port. Founded in the 1930s and known to gen­er­a­tions of In­di­ans for its Ma­hara­jah mas­cot, Air In­dia has a com­plex fleet, too many staff rel­a­tive to its peers and $8.5 bil­lion in debt. Since 2012, New Delhi has in­jected $3.6 bil­lion to keep it afloat.

An of­fi­cial in Modi’s of­fice said the leader, un­der pres­sure to cut spend­ing and boost ba­sic in­fra­struc­ture like ports and roads, is in “no mood” to pro­vide fresh mon­e­tary as­sis­tance to any loss­mak­ing pub­lic sec­tor com­pany. The of­fi­cial said that top bureau­crats in the civil avi­a­tion min­istry and at Air In­dia had been asked to present a re­port on how a Vol­un­tary Re­tire­ment Scheme (VRS) could be of­fered to about 15,000 of Air In­dia’s 40,000 staffers, in­clud­ing con­trac­tors.

“Noth­ing has been fi­nal­ized but our aim is to make the strate­gic sale as sim­ple as we can,” said a sec­ond top of­fi­cial in New Delhi, in­volved in the air­line’s daily op­er­a­tions, adding that any fresh in­vest­ments would be put on hold.

Pre­vi­ous at­tempts to off­load the air­line have failed mainly be­cause of the scale and com­plex­ity of prob­lems at Air In­dia, as well as its in­flu­en­tial unions. If Modi can pull the pri­va­ti­za­tion off, it will but­tress his cre­den­tials as a reformer brave enough to wade into some of the coun­try’s most in­tractable prob­lems.

In its hey­day, Air In­dia boasted of a tal­ent pool that newly founded air­lines dipped into. The gov­ern­ment will, how­ever, need to con­vince seven trade unions to ac­cept the plan to make the com­pany at­trac­tive to po­ten­tial buy­ers, in­clud­ing buy­outs and other ef­forts to slash costs. Their ini­tial re­sponse was not pos­i­tive. “The gov­ern­ment will pro­pose a VRS scheme and we will throw their pro­posal in the dust­bin,” said J.B. Ka­dian, leader of a union that rep­re­sents 8,000 non-tech­ni­cal staff of Air In­dia. Ka­dian said a joint fo­rum of unions rep­re­sent­ing Air In­dia em­ploy­ees will launch “an ag­i­ta­tion” in Au­gust if the gov­ern­ment pur­sues its plans to pri­va­tize the na­tional car­rier.

A com­mit­tee of five se­nior fed­eral min­is­ters, led by Fi­nance Min­is­ter Arun Jait­ley, is ex­pected to meet this month and be­gin iron­ing out the finer de­tails of the pri­va­ti­za­tion plan. In the mean­time, Civil Avi­a­tion Min­is­ter Ashok Gajapathi Raju said he wants Air In­dia to be­gin cut­ting at all lev­els.

Ear­lier this month, the air­line de­cided to stop serv­ing non­veg­e­tar­ian meals in the econ­omy class on do­mes­tic flights, in a bid to save up to 100 mil­lion ru­pees ($1.6 mil­lion) over 10 months. The ac­tion pro­voked up­roar on so­cial me­dia and was be­lit­tled by avi­a­tion ex­perts, who ar­gue Air In­dia man­age­ment needs a mas­sive struc­tural over­haul, tack­ling thornier is­sues like fleet and staff, not meals. The air­line is also work­ing to re­duce the time its planes are not fly­ing and launch­ing di­rect flights to new in­ter­na­tional des­ti­na­tions. In July, Air In­dia started a di­rect flight to Wash­ing­ton. It will start fly­ing to Stock­holm, Copen­hagen and Los An­ge­les later this year. — Reuters

Em­ploy­ees of French auto parts man­u­fac­turer GM&S, threat­ened with liq­ui­da­tion, hold CGT French union flag as they block a site of their sup­plier Re­nault, yes­ter­day in Villeroy, cen­tral France. Around 280 jobs are on the line at the site, a sup­plier to Peugeot Citroen and Re­nault, that was placed in re­ceiver­ship in De­cem­ber. — AFP

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