Air India readies staff for transition to hived off units

Written by Shaheen Mansuri | New Delhi | Updated: Feb 15 2011, 03:40am hrs
Flag carrier Air India, dogged by frequent labour unrest over the years, wants to take no chances as it prepares its staff for an imminent hive off of its maintenance, repair and overhaul (MRO) and ground handling divisions into separate companies.

According to sources, AI, which is in the process of preparing a detailed road map for hiving off its MRO and ground handling divisions into Air India Engineering Services and Air India Air Transport Services, respectively, has already had a series of meetings with the 18,000 employees in these divisions on the matter, a move aimed at mitigating any likely resentment against a staff shift to these divisions.

According to sources, there were initial inhibitions from employees to move from AI to these entities which are likely to be formed soon. Said an official at AI, The management is having a series of meetings with the technical, engineering and ground handling staff through their unions to explain how crucial it is to realign these business divisions into separate companies. He further explained that the MRO company, once hived off by AI, will not only have an agreement to service aircraft of its anchor customer AI, but will also have a global reach. AI is already scouting for a foreign partner to form a JV by which it can access to many other global markets.

The official added that once the separate entity is formed, its employees will not be dependent on AI but will be able to make their own decisions and a different wage agreement will also be made in consultation with unions representing them. Over the years, the company will build up its capabilities, facilities and equipment in order to handle the most modern aircraft before other MRO companies do. The newly formed company will gradually gain greater autonomy to pursue new business opportunities from around the world. This will further encourage a sharper focus on productivity, efficiency, quality and more value-added services for customers, he said, adding that AI has a wealth of experience. The technical staff has developed a rich inventory of skills and knowledge to provide on-time deliveries at the highest quality to more global airlines. Simultaneously, if ground handling also becomes a separate company, the company can service more carriers independently with an independent management team. Last year, AI and Singapore Airport Terminal Services signed an agreement to form a single 50:50 JV firm for ground handling work.