AI’s new challenge
After the hasty merger of the erstwhile Indian Airlines with Air India turned out to be a disaster, the government has now come up with a proposal to hive off the engineering and transport services of Air India into two subsidiaries — Air India Engineering Services and Air India Transport.
These are supposed to be two strategic business units, one for engineering and the other for ground handling. It sounds good as they could turn out to be two profit centres, but the challenge will be to turn this into reality.
This proposal is not new. It had been announced earlier by the previous Air India managing director, Arvind Jadhav, a few years ago. It would be revealing to know why it never took off. Have the problems been resolved? Have the tax implications been sorted out?
The proposal involves shifting out employees by the thousands to both these subsidiaries. It is presumed that the employees, or their representatives, were taken into confidence about their transfers. Have the cultural differences and hostility between the staff of the two airlines been resolved or will it spill over to the new subsidiaries? These are the crucial issues that need to be resolved if these subsidiaries are to be profit centres. Otherwise this would be a cosmetic change designed to lighten Air India’s balance sheet of the employees’ wage bill.
The real solution to Air India’s plight is 99 per cent professionalisation of the airline. The government can hold the golden share, as is done elsewhere, which gives it the right to intervene if it feels its interests are being jeopardised.
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