AI staff will be redeployed, size to be cut by half

Smita Aggarwal
Posted: Thursday, Jul 09, 2009 at 0929 hrs IST
Updated: Thursday, Jul 09, 2009 at 0929 hrs IST

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New Delhi: The government is learnt to have decided on a largescale redeployment of Air India (AI) staff to its strategic business units (SBUs), cutting the airline’s current 33,000 strength by nearly 50 per cent.

This will bring down AI’s employees-per-aircraft ratio from a highly uncompetitive 230:1 to a globally accepted 100-150:1.

Minutes of Civil Aviation Minister Praful Patel meeting at the Prime Minister’s Office last month, available with The Indian Express, indicate that the decision was reached after detailed discussions on the carrier’s mounting losses and a presentation by Civil Aviation Secretary M Nambiar.

Top government sources told The Express that around 15,000 employees will be absorbed in the SBUs, which the government expects will become independent profit centres once they are operational.

“The two Maintenance, Repair and Overhaul (MRO) joint ventures with Boeing and Airbus will absorb around 5,000-6,000 employees. The ground handling joint venture with Singapore firm SATS is expected to absorb another 8,000-9,000. These SBUs will be hived off to become independent profit centres,” said a senior official.

For speedy operationalisation of airline’s subsidiary businesses, AI plans to re-designate an existing management position as Executive Director of Corporate Strategy.

AI CMD Arvind Jadhav has asked for finalization of employees service rules and regulations and performance-related standard operating procedures in order to fast-track the integration of the old Air India and Indian Airlines staff. The airline will draw up an action plan for the next 6 months, which will be part of the turnaround plan to be submitted to the government.

The Finance Ministry will review the pricing for aviation fuel, which accounts for 30-40 per cent of an airline’s operational costs and accord it ‘declared goods’ status. The move will bring down sales tax to 4 per cent, which is currently 24 per cent in some states. The Ministry will also ask government servants to fly only AI on official trips.

It was also decided at the meeting that the Petroleum and Natural Gas Ministry will intervene with oil marketing companies to provide a six-month credit line to the carrier.

AI will leverage its properties and other real estate assets to generate additional revenues and bring in cash, said an official. “It will also undertake rent-reduction,” he added.

Comments

» A I crisis

Posted by yogita on 2009-07-11 19:32:58.396734+05:30
By whom'directions profitable routes were cut.What action have been taken against him.Who are the persons,accepted defected leased aircraft due to which AI suffered a loss of several crores.Action should be taken against Representatives of Mgmt Who signed an agreement of PLI without evaluting their actual work.In fact they gave such a big amount so that money can be drained to their personal accts. there for recovery should be made from pilots, engineers,managers and desision takeing bodies including minister PRIOR TO GIVE BAILOUT

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» patel has got ai in mess

Posted by shivani on 2009-07-09 21:13:40.66447+05:30
the national carrier was doing just fine bfr mr patel became the aviation minister.ai never had to borrow ever to run itself

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» patel has brought this ai doom

Posted by shivani on 2009-07-09 20:50:31.257459+05:30
the national carrier was doing just fine bfr mr patel became the aviation minister.ai never had to borrow ever to run itself

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» praful patel is solely responsible for ai mess

Posted by shivani on 2009-07-09 20:35:51.275645+05:30
who hired the excess staff in ai?or did they thmseleves forcibly get jobs they wanted

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» Unholy Nexus for IA

Posted by avince on 2009-07-09 19:20:38.230802+05:30
First and foremost there should be an enquiry into why some high capacity high revenue flight routes were stopped suddenly by AI and private airlines started their flights on the exact same routes on same schedule. There is a deep nexus betwen authorities who bleed AI for private party benefit.

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» AI

Posted by H.Patel on 2009-07-09 18:40:20.201149+05:30
Let the Govt. cut all the fringe benefits given to retired AI employees such as free travel for all AI kids until death. A decent ration should be 1:60 per plane not 100-150 but still much better than 230 which is currently has. Also, give golden handshake to all inflight crew who are not in tip top condition.

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» The Civil Aviation Minister

Posted by sbudiavar on 2009-07-09 17:57:39.643826+05:30
Mr Praful Patel is a well known figure, when AI was bleeding white he wanted his relatives and friends to avail upgrades- it seems he is not only shameless creature also a person not worth the salt he has in in this country who has given many rights to foreign agents for selling AI tickets. Five years and somebody wakes up today and says that the house is on fire. Remeber Praful does not posses a car like many politicos- his election returns filed recently the biggest joke this country has ever heard of. I think his babbling day in and day out is not going to help AI any more. He should be sacked from the cabinet itself. What does the PM say for his 100 day agenda? Any takers? world class railways,world class budget and world class stock market is there for everyone to see. We Indians will be bled by these Unworthy politicos and bureaucrats and later cry wolf. In a way we all are responsible to the state of affairs be farmers suicide,Naxals or the newly coined terrorists. Go PATEL GO!

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» AI's woes and SBUs

Posted by sbudiavar on 2009-07-09 17:42:39.143245+05:30
First of all AI has to immeiatly 'wrapup' the 48 or so Exe.Dir. posts relook directors presntly holding board membership,revert all artificialy created posts for promotions,rationalize foreign postings on merit-presently scychopahncy,abolish foreign based Exe. Dir.,freeze on high end rentals and out leasing of highly priced accomodations in India/abroad, stop furnishings of all accomodations of ALL executives. This would create some heartburns and remonstrations by the high and politically mighty who should be quitely told to which direction the door is. Freeze PLI for all and work out a mechanism for attracting the bold,sincere and worthy people within the ranks. Investigate the honchos who gave flying rights to foreign carriers for free tickets. In fact re-work the whole system being carried out by the earlier CMDs and MDs politically appointed, functionally naive. Enquire the aircrat purchase and gifts of assets to private parties. SBUs are workable and sincere people to head them.

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» NO!

Posted by YSS on 2009-07-09 15:21:55.979955+05:30
No! Tata and all should refuse to help AI. It is the only way these politicians will know that industrialists are NOT going to help them when they get themselves in such deep red. We should recall that AI was taken from JRD Tata forcibly. He was not allowed to head it properly. Now, the government does this to the airline and calls top honchos to clear the mess up.I'm a supporter of Ayn Rand's philosophy. 'Atlas Shrugged' is a novel by her which details exactly such a scenario. Note that this is exactly what has happened to dear AI...

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» wHO IS TO BLAME FOR THIS MESS-PRAFUL?

Posted by Jayasankar on 2009-07-09 14:30:57.994207+05:30
Yes, Praful is also responsible for this mess.percentage 70%-Employees 10% and Unions 20% What was Congress doing all these 5 Yrs.scraching their Ass?.Why Victimise employee's and throw them out?. why can't Minister be thrown out?.Why can't Minister Cut unwanted Expenses?.Who will feed Employee's families?. will Sonia and Co., do it?

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AI staff will be redeployed, size to be cut by half

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