GoM clears VRS for Air India
10 November 2011
New Delhi: A government panel, otherwise referred to as a group of ministers (GoM), chaired by Pranab Mukherjee has asked state-owned Air India to offer an attractive voluntary retirement scheme (VRS) to its staff that can be part-funded by the government. The move comes with the realisation that no turnaround of the financially beleaguered carrier was possible without slashing its Rs3,600 crore annual wage bill.
While the exact contours of the VRS are yet to be worked out, the scheme would target taking at least 4,000 staff off payrolls, airline officials said.
The GoM decision, taken at its meeting on 28 October, would be sent to the Cabinet for approval.
Industry experts suggest a ''golden handshake'' could likely cost the carrier upto Rs400 crore.
Air India, formed after merger of two national airlines - erstwhile Indian Airlines and Air India - has over 36,000 permanent employees and operates a fleet of 121 aircraft.
The industry standard of employee's ratio per aircraft is 100-150.
Air India's annual wage bill stands at nearly Rs3,600 crore, which, as per the original turnaround plan, should be brought down by at least 40 per cent.
The airline hopes to trim its workforce by deploying nearly half of them in two new subsidiaries - Maintenance, Repair and Overhaul and ground handling - by next year.