With the Central government taking swift action on disinvestment of Air India (AI), it is also considering various options such as VRS (Voluntary Retirement Scheme) and employment in other PSUs to absorb the employees.
With the Central government taking swift action on disinvestment of Air India (AI), it is also considering various options such as VRS (Voluntary Retirement Scheme) and employment in other PSUs to absorb the employees, PTI reported. “Various options are under consideration to protect the interests of the employees,” civil aviation secretary R N Choubey told PTI. Last week, Civil Aviation Minister Jayant Sinha told CNBC TV18, “We will make every effort to protect Air India staff. We don’t want to saddle Air India or its subsidiaries with unsustainable debt.”
Earlier last week, Centre has approved foreign direct investment (FDI) of up to 49 percent in the debt-ridden carrier. As of September 2017, the national carrier has debt outstanding of more than Rs 52,000 crore.
After the Union Cabinet approved investment of up to 49% in Air India, Minister of State for Civil Aviation Jayant Sinha says that the government wants Air India to remain an Indian carrier. “We want Air India to be an Indian carrier. When you look at what the foreign ownership caps are around the world, they are 49% or below 49%. The typical air services agreement that is signed for bilateral rights also in intended to ensure that substantial ownership and effective control stays with nationals of the country,” Jayant Sinha told the channel. Further, the Civil Aviation minister said that the government is looking to close the stake sale by 2018-end.
Interestingly, while the Union Cabinet allowing 100% foreign direct investment into Indian airline operators under the automatic route, it has different rules for state-run Air India and allowed foreign airlines to invest up to 49% under the approval route, subject to the conditions that: (i) Foreign investment(s) in Air India, including that of foreign Airline(s), shall not exceed 49 per cent either directly or indirectly ensuring that substantial ownership and effective control of Air India shall continue to be vested in Indian National.
Earlier, a parliamentary panel on transport, tourism and culture recommended that the national carrier Air Indian should be given at least five years to revive and write-off its debt. The Parliamentary Standing Committee on Transport, Tourism and Culture concluded that the government should review its decision to privatise or disinvest Air India and explore the possibility of “an alternative to disinvestment of our national carrier which is our national pride.” The committee had also expressed apprehension that Air India’s strategic disinvestment “would result in job loss of many people” and asked the government to “make an assessment” of the job loss before deciding on stake sale.