Govt mulls divesting Air India employees ahead of stake sale

15 Jan 2018


The government is exploring a new option of first divesting Air India employees through voluntary retirement package and shifting those unwilling to opt out to other public sector enterprises, to ward off employee resistance to the airline's divestment, reports quoting official sources said.

As the government is expected to absorb most of the airline's Rs50,000-crore debt, which is the main stumbling block in the divestment process, the airline will be staying afloat on taxpayers' money.

It is also not known what bidders will offer for a carrier sans employees and scaled down fleet of aircraft. Air India has also lost much of its earlier goodwill with the entry of private carriers. 

The government has now allowed foreign direct investment of up to 49 per cent in the debt-laden carrier, as part of Its efforts to ensure a smooth divestment and a group of ministers are weighing various options.

On 10 January, the government allowed overseas entities, including foreign airlines, to own up to 49-per cent stake in Air India under the approval route.

Sources said the government is mulling providing airline employees the option of joining public sector companies as also the possibility of having a VRS package, adding that a final decision is yet to be made.

A PTI report quoting civil aviation secretary RN Choubey said various options are under consideration to protect the interests of the employees.

Air India and its subsidiaries have around 29,000 employees, including those on contract.

A group of ministers is in the process of finalising the modalities for the proposed strategic stake sale and expression of interest is likely to be invited from bidders soon.

While announcing the plan to permit 49 per cent foreign direct investment in Air India, which brings the airline at par with other domestic carriers and does away with preferential treatment, the government had said, "Substantial ownership and effective control of Air India shall continue to be vested in an Indian national."

There are opposing views to Air India's revival plan. While the move has been opposed by the Centre of Indian Trade Unions (CITU) and RSS-affiliated Swadeshi Jagaran Manch, among others, a parliamentary panel has suggested that Air India be given at least five years for revival.

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".

Under a turnaround plan approved by the previous UPA regime, Air India is to receive up to Rs 30,231 crore from the government subject to meeting certain performance thresholds. The ten-year bailout package began from 2012.

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