AI turnaround plan on Cabinet agenda next week

New Delhi: The proposal for second shot of equity infusion in the cash-strapped national carrier, Air India, is likely to be put up before the government next week, sources said. The proposal will also include two key issues of wage rationalisation and operationalisation of Strategic Business Units (SBUs), which will determine the success of Air India’s turnaround plan.
After holding extensive consultation with various wings of the government on Rs 1,200 crore bailout, this is the first time that the civil aviation ministry will be knocking on the doors of Cabinet Committee on Economic Affairs (CCEA) with its proposal. The airline is facing an acute cash problem and is feared that it may not be able to pay its around 30,000 employees beyond March, an official said. “Operationalisation of SBUs like ground handling and maintenance, repair and overhaul will help the carrier to have independent profit centres. It will also help the company to rationalise its manpower and deploy them in these SBUs,” the official said.
On the issue of wage rationalisation, the airline needs government’s assent before it can renegotiate any wage agreements with the unions. For the airline, the chips are down as both the finance ministry and the home ministry have rejected the equity infusion proposal.
03/12/10 Smita Aggarwal/Indian Express

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Categories: Air India Dec 2010