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Vandana Saxena
Mumbai, June 5: Top Air India (AI) officials have recommended that the Government finalise some of the long-pending issues such as voluntary-retirement scheme (VRS) and retirement-age limit before going in for privatisation. While these steps will help the airline to control expenditure these are also necessary to get good value for the shares, said a senior board member, adding that the company has to look attractive for investment.
"With over 18,500 employees, AI is overstaffed and needs to reduce the number of employees to cut cost," he said. Unfortunately while the Government has yet to introduce an attractive VRS scheme, it increased retirement age limit to 60 years from 58 years, the official said, adding that this has delayed the automatic process of downsizing the staff.
"We are getting conflicting signals form the Centre. While it recognises the need of VRS, it has yet to decide on the basic issues of the scheme," he said. They are working on three models for VRS and still to decide the minimumyears of service required to avail of the scheme.
AI will have to wait untill Indian Airline also finalises its VRS scheme. Meanwhile, the productivity-linked incentive (PLI) scheme was introduced in 1996 which will also affect VRS prospects, the official said.
Besides, the Government has yet to approve the board's decision to restore the former's service-age limit. The proposal has been pending with the ministry for the past six months. If implemented, over 500 employees will be able to leave the company immediately.
According to employees, the company needs an attractive VRS. The employess get several benefits such as medical and accomodation facilities. To woo employees to subscribe the scheme it has to be financially attractive, believe the staff. However, it would be an one-time expense, said George Abraham, general secretary of AI employees' Guild.
"We also need re-deployment of the existing staff," he said, adding that there are some departments which are overstaffed and these employees withspecial training can be deployed in other departments. For revival of the airline, the Government has to take some urgent decision, said Abraham.
AI also has to finalise the process for privatisation. While the basic policy decision for disinvestment of the Centre's stake was taken years ago, final approval has yet to come, said the official. The industry experts also believe that delay in decision-making will make affect the airline's revival plan.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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This story was printed from Net Express located at http://www.expressindia.com. Net Express provides a portal to India, with news from The Indian Express and The Financial Express along with sites on travel and tourism, the entertainment industry, the power sector, the environment and much more.
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