IA, A-I to shed 1,700 post-merger
State-run carriers Air-India and Indian Airlines will offer a voluntary retirement scheme (VRS) aimed at reducing their staff strength by more than 1,700 employees. A-I has 15,700 employees and IA, 19,300 now. A majority of the employees, who opt for voluntary retirement, are likely to join the maintenance, repair and overhaul facilities being set up in India by Boeing and Airbus, according to sources.
In 2003 and 2004, around 490 employees in IA and 400 in A-I had opted for VRS offered by the companies. But this time around, the outflow of funds for VRS is likely to be higher and the eligibility criteria, to be decided by the civil aviation ministry after the merger, will be different from those used for the previous schemes.
Earlier, the eligibility criteria covered permanent staff of companies – employees who had served continuously for more than 10 years or had attained 40 years of age. But licensed and technical categories were excluded.
The employees were entitled to an amount equivalent of 35 days’ salary for every year completed in service, plus 25 days’ salary a year for the remaining years of employment, or the salary for the remaining period of service, whichever was lower. Both the airlines are estimated to have spent nearly Rs 100 crore on the schemes.
A working group has now been formed to co-ordinate on issues likely to arise during the merger. The group consists of two directors from the ministry of civil aviation, personnel directors of both the carriers and a nominee of the merger consultant.
The civil aviation minister has indicated that the merger of the two carriers will take place in the next fiscal. Accenture with Ambit Corporate Finance has been appointed as the consultant to draw a road map for the merger. The merger is expected to help A-I compete effectively with global carriers like British Airways, Singapore Airlines and Qantas Airways.
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