The government is learnt to have decided on a largescale redeployment of Air India (AI) staff to its strategic business units (SBUs),cutting the airlines current 33,000 strength by nearly 50 per cent. This will bring down AIs employees-per-aircraft ratio from a highly uncompetitive 230:1 to a globally accepted 100-150:1. Minutes of Civil Aviation Minister Praful Patel meeting at the Prime Ministers Office last month,available with The Indian Express,indicate that the decision was reached after detailed discussions on the carriers mounting losses and a presentation by Civil Aviation Secretary M Nambiar. Top government sources told The Express that around 15,000 employees will be absorbed in the SBUs,which the government expects will become independent profit centres once they are operational. The two Maintenance,Repair and Overhaul (MRO) joint ventures with Boeing and Airbus will absorb around 5,000-6,000 employees. The ground handling joint venture with Singapore firm SATS is expected to absorb another 8,000-9,000. These SBUs will be hived off to become independent profit centres, said a senior official. For speedy operationalisation of airlines subsidiary businesses,AI plans to re-designate an existing management position as Executive Director of Corporate Strategy. AI CMD Arvind Jadhav has asked for finalization of employees service rules and regulations and performance-related standard operating procedures in order to fast-track the integration of the old Air India and Indian Airlines staff. The airline will draw up an action plan for the next 6 months,which will be part of the turnaround plan to be submitted to the government. The Finance Ministry will review the pricing for aviation fuel,which accounts for 30-40 per cent of an airlines operational costs and accord it declared goods status. The move will bring down sales tax to 4 per cent,which is currently 24 per cent in some states. The Ministry will also ask government servants to fly only AI on official trips. It was also decided at the meeting that the Petroleum and Natural Gas Ministry will intervene with oil marketing companies to provide a six-month credit line to the carrier. AI will leverage its properties and other real estate assets to generate additional revenues and bring in cash,said an official. It will also undertake rent-reduction, he added.
