Air India board okays Rs 800-cr VRS package

Union Civil Aviation Minister Ajit Singh on Tuesday confirmed that the board of Air India had approved a Rs 800-crore package to facilitate voluntary retirement of its employees.

“There was a proposal and the board recently approved the same with about Rs 10 lakh earmarked for some individuals,” he said answering a specific question. Further, as part of the Air India revamp plan, he said the airline would be hiving off two sections of its business—engineering and package handling—to form separate firms.

“About 7,000 of the engineering staff will be transferred to a separate firm which can also focus on maintenance repair and overhaul (MRO), while another 12,000 will be transferred to transportation services,” he said.

He said the steps would ensure that the per-aircraft employability matched international standards.
The Centre has also asked the national carrier to monetise its assets so that it has more working capital available. This will involve airline renting out some portions of its Nariman Point headquarters in Mumbai, other buildings and land. He said his ministry was in talks with the Oil Ministry to make aviation turbine fuel (ATF) a notified product to enable regulated pricing of the fuel.

“One of the biggest reasons for the financial crisis in the country’s aviation sector, including Air India, is the high operating cost. And ATF contributes to about 45 per cent of this cost on an average as India has one of the highest prices for the fuel compared to all the neighbouring countries and even some in South-East Asia,” he said.

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