Tuesday, 20 March 2012

Panel to fix timelines for Air India integration

Apanel set up to look into the integration of employees and wages of Air India Ltd and the erstwhile Indian Airlines is likely to fix a nine-month timeframe for the completion of the process.

If the recommendations of the panel are approved, it will pave the way for a uniform wage structure at the national carrier, which was merged in 2007 with Indian Airlines, the former domestic carrier.

In February, civil aviation minister Ajit Singh set up a panel to examine the recommendations of the Justice D.N. Dharmadhikari Committee report on workforce integration.

The three-member panel comprises Prashant Sukul, a joint secretary in the civil aviation ministry; A.K. Sinha, a joint secretary in the department of public enterprises, and Indian Farmers Fertiliser Cooperative Ltd’s director (human resources) R.P. Singh.

The Dharmadhikari committee report, which has been submitted to the ministry, has recommended several steps to integrate the workforce. These include bringing Air India employee salaries in line with the guidelines set by the department of public enterprises, according to two government officials, who did not want to be named.

This would mean salaries of some of the company’s employees will be on par with other state-owned firms such as Indian Oil Corp. Ltd, said one of the two government officials.

The panel will recommend timelines stretching from three months to nine months, said the official cited above.

Performance-linked incentives, which form a major portion of salaries at Air India, are likely to be discarded except for “some categories like pilots”.

For pilots, the panel is likely to suggest a new set of incentives that will be linked to productivity.

Air India had devised the performance-linked incentives after several pilots left the company, lured by higher salaries and incentives at private airlines such as Jet Airways (India) Ltd and SpiceJet Ltd.

The workforce integration will be the most tricky issue for Air India over the next few months, one of the two officials said.

Cash-strapped Air India, which has 14 unions representing sections of its employees, has faced three strikes since its merger, including two by its pilots.

Nobody was willing to bite the bullet as human resources is the most contentious issue at the airline, said an expert.

“They have stalled the decision for so long. I think they had a three- or six-month timeline, but dragged it on,” said Mohan Ranganathan, a Chennai-based aviation expert and a member of the Civil Aviation Safety Advisory Council. “Now, it will go to hundred other committees and they will continue without action.”

Air India’s employee strength is also likely to come down significantly over the next three years.

Around 7,500 employees are set to retire over the next three years, apart from which the airline has decided that those who have been signed on as contract workers will also have to go.

About 300 officers, who had retired, have been retained by the firm. Of these, 150 have been released in the past four months. Of the remaining 150, the airline plans to retain only pilots and engineers.

The engineering and ground-handling units will account for around 14,000 employees. The airline then plans to launch a voluntary retirement scheme, which, it hopes, will prune the workforce by 2,000-3,000 people.

The civil aviation ministry has already sent a cabinet note for Air India’s turnaround plan and the formation of two subsidiaries this month to the Prime Minister’s Office and cabinet secretariat, besides the finance ministry.

The Union cabinet has to approve the turnaround plan for the carrier this month as the deadline set by the consortium of banks leading the financial restructuring of Air India’s debt ends this month, said the second government official.

“Thirteen of the 16 banks have agreed with the plan, and most others will come around once the government clears equity infusion,” the official said, referring to some of the differences that have cropped up between the airline and the banks.

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