Air India to shed weight through MRO, ground handling subsidiaries
23 April 2011
New Delhi: State-owned Air India, reeling under a mountain of debt, and operating possibly the most heavily staffed aviation service in the world, is hoping that near half of its bloated work force of 40,000 would be absorbed two subsidiaries (Maintenance, Repair and Overhaul (MRO) and ground handling business) which it expects to hive-off from the core airline business in another two months.
According to airline sources, the proposal for hiving off MRO and ground handling business is ready and awaiting clearance from the civil aviation minister, Vayalar Ravi. It is expected to that the proposal would be sent by month-end to the cabinet secretariat for inclusion in the agenda for the next cabinet meet.
Sources said the MRO business is expected to absorb near 11,000 employees, while the ground handling business is expected to absorb another 8,000. Air India has formed a joint venture, AISATS, with Singaporean firm SATS for ground handling operations.
The badly struggling carrier is hoping to kill a couple of birds with one stone as hiving off the subsidiaries would create two separate profit centres for the airline and simultaneously absorb non-core business employees.
The proposal is part of airline's turnaround plan.
Meanwhile, it is being given to understand that the civil aviation ministry has asked Boeing to resolve all outstanding compensation issues related to delivery of the hugely delayed 787 Dreamliner aircraft at the earliest.