Outsiders change the AI script for soaring again

New Delhi: The comprehensive turnaround plan of Air India, envisaging no trimming of its staff or reduction in their wages, is a complete change from the earlier plan. And, it was actually pushed through by the five independent directors (IDs) on the AI board, reinforced by the strength of their numbers.
Says an ID who did not want to come on record: “We have made it clear to the management that the main priority is financial turnaround, for which SBI Caps has been hired. Then, we will look into the number of employees we need. If, for instance, we can increase our revenue by three per cent, we might need all these employees. So, we will decide on the HR issues — what is the ideal number of employees, is there a surplus, after the financial restructuring is complete.”
The director said the strategy was adopted to get the employees to support any restructuring proposal. “We (the IDs) had a two and a half hour meeting with the 12 unions and we told them we would be able to financially turn around the company. It is essential to demonstrate to them that change is possible,” said a source close to an ID.
The endorsement of the new plan represents a big shift. The airline was earlier looking at cutting cost by reducing the salary bill of Rs 3,100 crore by about Rs 800-900 crore. This included cutting the productivity-linked incentive part of the salary by half. It was talking about improving productivity and longer hours of working. All this was resisted by the unions, who also went on strike.
Civil aviation minister Praful Patel, who was instrumental in selected the IDs, endorsed the line, saying the aviation scenario had changed.
27/07/10 Business Standard

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Categories: NACIL Jul 2010