Air India's plans to hive off ground handling and engineering units into separate companies is facing opposition from labour unions which have issued directive to its members against taking a transfer to the new organisations.
On Wednesday Air India announced that its ground handling and maintenance repair and overhaul subsidiaries will become operational from Friday. The hiving off of these units into separate profit centres is a part of the airline's turn around strategy. The move will also help airline to reduce its Rs 3,400 crore wage bill by about a thousand crore.
"The proposal to hive off these two units is a part of the turn around plan of the national carrier, which has been duly approved by the Cabinet Committee on Economic Affairs (CCEA). From February 1, 2013 all persons working in the Ground Handling and Maintenance facilities would be deputed to these independent companies, but the service conditions, emoluments and perks will remain unchanged," Air India said in a statement on Wednesday. However union members say the airline has begun the process to transfer the employees to its subsidiaries.
Air India Employees Union representing the ground handling staff and All India Service Engineers Association representing technicians and unlicenced engineers have issued directives to their members not to accept transfer letters. A faction of Air Corporation Employees Union too has issued a similar directive, it is learnt.
"We had issued a strike notice against the transfer of our employees to new organisations last November and the issue is under conciliation before the labour commissioner. We are against transfer of our employees to the new companies," said R A B Mani, general secretary of Air India Employees Union. Mani fears that service conditions of his members will be changed upon joining the new company and existing labour agreements will turn void. Also employees are demanding that the airline clear their pending dues before transferring them to new company.
The Service Engineers Association and Aircraft Maintenance Engineers Association has filed a writ petition against hiving off of MRO in Bombay High Court and the hearing is due next month. "Since the petition is pending it is unfair on the part of management to operationalise the MRO,'' an union member said.
The proposal to hive off these two units is a part of the turn around plan of the national carrier, which has been duly approved by the Cabinet Committee on Economic Affairs. From February 1, 2013 all persons working in the Ground Handling and Maintenance facilities would be deputed to these independent companies, but the service conditions, emoluments and perks will remain unchanged.
Air India Air Transport Service Limited (ground handing company) was formed in 2003 and Air India Engineering Services Limited (MRO) was incorporated in 2004. AIATSL was formed to undertake ground handling activities not only for Air India but also for other airlines operating to India. AIATSL has undertaking taking some of the ground handling activities at Kozhikode, Ahmedabad and Amritsar subsequently expanding its operations to include more airlines, ground activities in stations like Mangalore, Trichi, Pune, Chennai, and Kolkata etc.
The company has been rendering Airports Ground Handling Services, including Passenger Handling, Ramp Handling, Security Handling and Cargo Handling during the year for the Holding Company i.e. Air India Limited. Some of the client airlines of the company for some of the services at different airports in India include Singapore Airlines, South African Airways, Emirates, Kuwait Airways and Ethiopian Airlines.
Air India would, initially, provide for the capital expenditure of the two subsidiaries to stabilize their operations. Operationalisation of the two subsidiaries would also bring down the aircraft–employee ratio in Air India to global standards, the airline said.