Will Air India, the sinking national carrier that's being propped by government cash infusions, be listed on the exchanges?
The Dharmadhikari Committee, which has worked out a human resources plan for the merged Air India, seems to thinks so. In its report, which was made public for the first time today (21 June), the committee has recommended that Air India be listed on the stock exchanges and employees be given stock options as part of a voluntary retirement scheme (VRS). The suggestion has been made for 7,000 of Air India older employees to bring the airline on a par with the industry in terms of manpower to aircraft ratio.
Seems this is the solution being proffered: the golden handshake to employees to be offered VRS will be paper gold (employee stock options), and the listing is being sought to give them an exit at some point, in case Air India is fit to be listed.
Civil Aviation minister Ajit Singh has already committed to implementing the findings of this committee quickly, but it remains to be seen if the government is in any hurry to even consider taking the airline public, especially when it is in the midst of a prolonged pilot strike.
The report said: "The committee recommends a viable VRS to all categories of employees with a sizable proportion of the benefits being made available in the form of ESOPs (stock options). In view of severe financial constraints, Air India management may approach government to support a viable VRS scheme and also seek urgent decisions facilitating the implementation of the ESOP option (including valuing all tangible assets of the company within and outside the country, listing of the company in the stock market, allocating a fraction of total shares for the purpose, etc.) for such voluntary retirees and also the regular employees in lieu of arrears payable to them."
Another startling recommendation is that instead of continuing with the performance-linked incentive (PLI) scheme in its present form - where fixed allowances are paid - the airline should offer a maximum of two service extensions of one year beyond 58 years to deserving employees. So if a senior employee is found eligible, he or she can extend service in Air India for two years on a contractual basis.
But how does this rationalise the airline's manpower? The report says this extension can be given to only 10 percent of employees in each grade.
On the issue of free passages also, the committee has made detailed recommendations. Passages allow employees free travel for family members. At present, any one from mother-in-law to aunt and siblings are allowed free passage but this list will now be restricted to just immediate family members - self, spouse, children and dependent parents.
The committee has recommended that instead of free passage anytime, "Home travel concession (HTC) be given for self and family once every year; LTC, once in every two years, anywhere in the country, and LTC (Foreign) once every three years anywhere in the world where Air India is flying on confirmed basis. Entitlement of the class of travel would be as existing on date... During HTC and LTC, the employees can avail encashment of 10 days' leave annually, available in their account. This encashment of 10 days' leave would be in addition to the encashment of leave available at the time of retirement."
For retired Air Indians, free passage has been removed and instead they will now be allowed confirmed booking at 50 percent of the lowest fare any time they want to travel.
Singh has already said that the implementation of this report will save the airline Rs 200 crore annually since all incentives would be based on actuals and manpower at all levels would be rationalised.