Rs 2,400 cr aid for AI riddled with riders

New Delhi: Plan to revamp national carrier Air India (AI) and make it a profitable enterprise is ready. Group of ministers (GoM) headed by finance minister Pranab Mukherjee that met last Thursday, agreed ‘in-principle’ to a civil aviation minister Praful Patel proposal to infuse Rs 2,400 crore within six months for saving the airline, which has been losing Rs 400 crore every month.
But, the riders are many for infusion of fresh funds. As recommended by a panel headed by cabinet secretary K M Chandrasekhar, Air India will have to cut down its workforce by more than half to 13,000-15,000 from the existing 30,000. The reduction in number of employees would be in accordance with reduction in fleet size.
“He (civil aviation minister) has said that the fleet size of AI should be brought down to 95 from 146 at present. The issues were discussed at the first meeting of GoM on Thursday. The ministerial group will meet again in a week,” a senior official in the prime minister's office - who did not want to be named —told Financial Chronicle.
But, Patel, Chandrasekhar Panel and PMO recognise that workers unions “are very uncomfortable with the new preposition as it entails a drastic cut in pay packets as well”.
AI has asked the government to infuse Rs 5,000 crore. Infusion of funds requires cabinet approval. The civil aviation ministry has already prepared draft note on fund infusion to be sent to the cabinet.
Patel's suggestion on reduction in manpower may not go well with the employees unions which are already at loggerheads with the management over sharp cuts in productivity-linked incentives (PLIs).
25/10/09 KA Badarinath/Parul Chhaparia/mydigitalfc.com

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Categories: NACIL Oct 2009