New Delhi: he Union ministry of finance has turned down a proposal from loss-making Air India (AI) that it be provided Rs 1,200 crore to fund a Voluntary Retirement Scheme (VRS).
However, the state-owned carrier also expects its personnel to reduce by about 4,600 through normal retirement over the next three years, translating to Rs 300 crore of annual saving in staff costs.
Senior government officials say the ministry had noted the expected retirements. Also, around 12,000 employees had been transferred to the airline's new ground handling and maintenance, repair & overhaul (MRO) ventures this year. The ministry, therefore, did not see any rationale in a VRS.
"Our natural attrition rate is quite high. Even without the VRS, over the next three years, around 1,500 employees would retire from service every year. As a result of this, our wage bill would come down by about Rs 300 crore every year," said a senior AI executive. The airline is projected to have around 9,500 employees by 2015-16. In the current financial year itself, staff costs are estimated to come down to Rs 3,100 crore from Rs 3,300 crore in 2012-13.
16/09/13 Sharmistha Mukerjee/Businsess Standard
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However, the state-owned carrier also expects its personnel to reduce by about 4,600 through normal retirement over the next three years, translating to Rs 300 crore of annual saving in staff costs.
Senior government officials say the ministry had noted the expected retirements. Also, around 12,000 employees had been transferred to the airline's new ground handling and maintenance, repair & overhaul (MRO) ventures this year. The ministry, therefore, did not see any rationale in a VRS.
"Our natural attrition rate is quite high. Even without the VRS, over the next three years, around 1,500 employees would retire from service every year. As a result of this, our wage bill would come down by about Rs 300 crore every year," said a senior AI executive. The airline is projected to have around 9,500 employees by 2015-16. In the current financial year itself, staff costs are estimated to come down to Rs 3,100 crore from Rs 3,300 crore in 2012-13.
16/09/13 Sharmistha Mukerjee/Businsess Standard
