Thursday, February 11, 2016

Air India announces hiring freeze for casual workers; to cut excess staff

KNOWN as a turnaround man, Air India Air India chairman and managing director Ashwani Lohani is bang on target as in a bid to cut over Rs 50,000 crore debt in the national carrier, Lohani has ordered freeze on hiring of casual labour, and shifting some of them who work as ground handlers and in engineering department to subsidiary companies.
This is the latest in the...
several cost-cutting decisions taken by Lohani, reported a national daily.
"No fresh face casual labour is to be engaged. This may be noted for strict compliance. It will be the personal responsibility of the EDs (executive directors) and GM (finance) of the region to ensure this." said an order recently issued by Lohani and sent to all senior officials of the airline.
Lohani, in his letter added, "The existing casual strength of AI should be reviewed with a view to their discontinuation or shifting of those casuals who are doing work on ground handling or engineering to the AIATSL or AIESL, respectively."
The issue of casual workers has been a thorny one as around 2,000-odd working with the airline largely remained unorganised and unrepresented, and claim to be getting raw deal from the management. Casual loaders at the airline are paid as per the work requirement while the permanent ones are on payroll.
Viji Jagtap, president of Air India Kamgar Sanghatana, an association of casual workers, said they have not been taken on payroll despite various court orders in the past since 1996.
Air India, has a 21,000 strong workforce, which amounts to around Rs 3,400 crore in annual wage bill. The airline is presently surviving on aid of Rs 30,000 crore from the central government.
The national carrier has achieved about 50 percent reduction in its aircraft-to-employee ratio in the last fiscal over FY2012. The airline claims lowest aircraft-to-employee ratio among all the full service carriers in the country. While the aircraft-to-employee ratio decreased to 1:114, the employee cost of the total cost decreased by 0.22 percent to touch 11.68 percent of revenues in the last fiscal as compared to 12.9 percent a year before.
With 133 aircraft in its fleet the national carrier has now 114 employees per aircraft as on March 31, 2015 excluding MRO and ground handling subsidiaries as compared to 135 employees per aircraft in 2014.
"The present aircraft-to-employee ratio (1:114) which is half of that in 2012 (1:221) showcases how efficiently and strategically Air India is using its manpower." an airline official said.
Meanwhile, in a big boost to Air India's target to become profitable by 2018-19, its ground handling subsidiary Air India Air Transport Services Ltd (AIATSL) has reported profits for the first year of its operation as a separate company.
AIATSL and Air India Engineering Services Ltd were carved out as subsidiaries of the airline as part of its turnaround and financial restructuring plans.
As part of Air India’s strategy to improve its revenues, the airline has asked its ground handling, engineering and hotel units to take business from other airlines. The total loss of Air India is over Rs 20,000 crore that the Maharaja accumulated over the years. For the year through March 2016, it is expected to post a consolidated net loss of Rs 5,400 crore. On an operational basis, however, it is projected to become profitable by the end of this fiscal.
Increased business and profits from subsidiaries is one of the key strategy behind Air India's plans to advance its profits by three years. CMD Lohani has asked SBI Capital Markets to come up with suggestions to fly the airline back to black by 2018-19. A turnaround plan prepared by the investment bank in 2012 had projected the national carrier to post a net profit by 2021-22.
Lohani is an engineer-turned-bureaucrat who can “handle sick companies and turn them around”. He is “a highly decorated officer who is also known as Mr. Turnaround.” So says his LinkedIn profile. He has four engineering degrees and last year on August 20, he was named the chairman and managing director (CMD) of ailing national carrier Air India Ltd for three years. He is also credited with the turnaround of the ITDC post-disinvestment in 2001-02.

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