The national carrier Air India (AI) is planning to seek an additional financial support of over R1,000 crore from the government to offer a voluntary retirement scheme (VRS) to its employees. This would be in addition to the R4,000 crore that the government has already allocated as budgetary support for the cash-strapped airline during 2012-12.
The airline board that met last week has approved the proposal. The management will now send it to the civil aviation ministry to take it up with the finance ministry. ?The proposal is yet to be sent to the aviation ministry. We need over R1,000 crore to offer VRS to over 5,000 employees,? said an airline official.
The airline has around 28,000 employees and an annual wage bill of R3,000 crore. It has been planning to offer VRS to its staff for a long time. Even the justice Dharmadhikari committee?s latest report on pay parity of erstwhile Air India and Indian Airlines suggests a VRS for 7,000 of its employees in the next five years. The airline official said that since the carrier had no money of its own, the success of the scheme would depend on how much funds its gets from the government.
The airline official said, initially, the demand would be for less than R500 crore as the scheme would be brought out in phases. ?About R1,000 crore would be required only when the scheme is offered to 5,000 or more employees. We are working out all these modalities and send the proposal to aviation ministry accordingly,? the official said.
There is no end to the airline?s financial woes. It has been incurring a revenue loss of R10-12 crore for last two months due to the pilots strike hitting most of its international operations. The carrier urgently needs to bring down its staff cost as it is a part of the bigger turnaround plan, for which the government has already committed to infuse R30,000 crore by 2020.
