Scheme to cover 10% of employees & save Rs. 200 cr
In order to reduce costs and attain efficiency among its workforce, national carrier Air India (AI) is set to come out with an attractive voluntary scheme (VRS) within the next three months.
The proposed VRS may also include offering alternative contractual jobs to family members of those opting for the scheme. Sources said these jobs may be offered in the proposed subsidiaries of AI like the Air India Engineering Services (for maintenance, repair and overhaul) and Air India Transport Services (for ground handling).
Both subsidiaries have been proposed and approved by the Union Cabinet which cleared the financial restructuring of Air India in April this year. The reduction in manpower cost is one of the conditions put by the Cabinet that has approved AI?s turnaround plan. The carrier also has one of the highest aircraft-employee ratio. It has over 220 employees per aircraft, compared with other international carriers which usually have less than 200 or 150 employees per aircraft.
?The VRS package has to be lucrative to the staff. We are working on it,? Rohit Nandan, AI chairman and managing director, said.
The proposed VRS scheme is likely to cover 10% of the employees and will save up to R200 crore for the cash-strapped airline. AI has around 27,500 employees and an annual wage bill of R2,800 crore. Experts said attracting employees to opt for the VRS would not be that difficult as over 7,000 employees are slated to retire in the next three years. An AI official said that the scheme would be offered to all sections of employees including pilots, engineers, ground staff, executives, etc.
Though in the last couple of years the carrier has managed to bring down the number of employees from around 34,000 to under 28,000, the reduction has primarily been due to natural retirement or exit. The airline?s VRS schemes have not been successful in the past. The VRS schemes in 2003 and 2008 attracted only around 1,000 people.
?Earlier there were no incentives to take VRS. People who had better opportunities opted for VRS. But if the airline has to seriously reduce its manpower through VRS, the scheme has to be lucrative,? another AI official said.
