No job loss, assure airlines chiefs

Employees promised protection of salaries and seniority.

The chiefs of Air-India and Indian Airlines have written to their respective employees, assuring that there will be no retrenchment after the merger of the two state-owned aviation companies.

The letter also promises protection of salaries and seniority.

"I would like to assure you that HR issues are a top priority with the government and the board and management of the two companies and any retrenchment of personnel as a result of the merger has been categorically ruled out," Air-India chairman and managing director Vasudevan Thulasidas said in a letter to the employees.

A similar letter has gone to the Indian Airlines' employees from the company's chairman and managing director V Trivedi.

However, a source said that there could be a freeze on fresh hiring for some time.

"A fair approach to handling people's concerns will be adopted. The process would be tailored to ensure that no employee is worse off as a result of the merger and due care will be taken to protect remuneration, perquisites and status of all the employees," added the A-I chief's letter.

Accenture and Ambit Corporate Finance are currently advising the government on the merger proposal of the two airlines.

The advisers are in the process of working out common guidelines in order to ensure that employees are not losing out in terms of seniority and wage structure in the merged entity. Air-India has 15,500 employees, while Indian Airlines has 18,000.

Industry analysts pointed out that the ideal employee-aircraft ratio would be between 250 and 300.

"Under the assumption of 120 fleet, the employee-aircraft ratio would be 280, which is ideal for an international airline operating bigger jets compared to a region-centric, low-cost carrier or a small full-service carrier. We may not go for further enhancement of headcount, but, at the same time, there will not be any retrenchment," said a source close to the discussions.

According to the report prepared by consultants, the merged entity, with 120 planes, will have a bigger fleet than Emirates (93), Singapore Airlines (118) and Malaysian Airlines (110).

Earlier, the government had appointed a core group of senior officials in the civil aviation ministry.

In addition, four joint working groups have also been constituted to coordinate on each of the major issues likely to arise during the process of merger, namely commercial, human resources, finance and operations.

The letter to the employees pointed out that the merger of Air-India and Indian Airlines was not a new proposition. "It has become imperative now, more than ever earlier, to effectively leverage on synergies arising out of complementary networks so as to position ourselves as a dominant player in the aviation arena," it added.