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Tuesday, February 25, 2020

Air India divestment: ‘Reasonable level of protection’ for staff

In an interview with The Indian Express, Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey said “there has to be a balance” on protection for employees.

Written by Pranav Mukul , Aanchal Magazine | New Delhi | Updated: February 4, 2020 7:06:05 am
Air India, Air India disinvestment, Air India debts, Air India sale, Air India privatisation, Air India disinvestment explained The government has set an ambitious target of Rs 2.1 lakh crore from disinvestment receipts in the Budget for 2020-21.

The government will offer a “reasonable level of protection” to the employees when it divests its stake in Air India, but at the same time offer flexibility to the investors, Secretary, Department of Investment and Public Asset Management (DIPAM) Tuhin Kanta Pandey said. In an interview with The Indian Express, Pandey said “there has to be a balance” on protection for employees.

When asked if the new investor will be compelled to retain the national carrier’s employees, Pandey said: “Those things have been worked out in the SPA (share purchase agreement) and they would be revealed to the investors and their views would be taken on that. Of course, there will be certain protection for the employees but only a reasonable level.”

Further, in run up to the disinvestment, the Civil Aviation Ministry has been in discussions with Air India unions to iron out certain differences. “You have to balance it between the point of view of investors, the flexibility which you have to give to the investors and the security of the employees. There has to be a balance,” he added.

Explained: Air India disinvestment — what govt has on offer

The Centre last month floated the expression of interest (EoI) for Air India, seeking bids from interested parties by March 17 for a 100 per cent stake in the flag carrier.

This is the second attempt for sale of Air India after the failed attempt in 2018. Losses notwithstanding, it has some lucrative assets that include prized slots at London’s choked Heathrow airport, a fleet of more than 100 planes and thousands of trained pilots and crew.

In the last disinvestment attempt, those potentially looking at bidding for the airline had also raised issues of the airline’s employee strength.

The airline has 17,984 employees, of which 9,617 are permanent staff. According to the preliminary information memorandum, 36 per cent of the permanent staff are set to retire in the next five years.

However, Air India’s Chairman and Managing Director Ashwani Lohani had earlier stated that the airline did not have any excess employees.

Shortly after the EoI was released last month, Civil Aviation Minister Hardeep Singh Puri had said that the government was open to revising, refining and tweaking its terms of sale.

The government has set an ambitious target of Rs 2.1 lakh crore from disinvestment receipts in the Budget for 2020-21. A chunk of this amount — nearly Rs 90,000 crore — is expected to be raised from the sale of Life Insurance Corporation and IDBI Bank.

Additionally, the Centre is banking on proceeds from the big ticket sale of Bharat Petroleum Corp Ltd, the EoI of which is likely to be floated in the next few days, Pandey told this newspaper.

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