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HR issues affected merger of AI and IA: Aviation secy
NEW DELHI: Air India’s (AI) merger with Indian Airlines would have brought in multiple benefits, but most were lost due to human resource (HR) issues, aviation secretary
NEW DELHI: Air India’s (AI) merger with Indian Airlines would have brought in multiple benefits, but most were lost due to human resource (HR) issues, aviation secretary RN Choubey told HT.
“The kind of advantages we thought we could derive (from the merger) were bogged down due to HR issues.”
The two airlines were merged on April 1, 2007, but issues relating to a common salary structure could not be settled for years. Till a few months back, pilots from AI and erstwhile IA, flying the same planes such as the Boeing 787 Dreamliner, were getting different salaries, which led to regular protests by pilots. Even after a uniform pay structure was introduced earlier this year, pilots from both sides have alleged that the other had received a better deal.
AI chairman and managing director Ashwani Lohani had criticised the merger in a blogpost, and said it was responsible for all the “ills” plaguing the flag carrier. “A merger that really never happened and in the process resulted in a chaotic situation is at the back of all ills that we are currently witness to,” Lohani wrote.
“There have been difficulties… some of the advantages which we wanted to derive from the merger have been derived, but then there are also significant disadvantages. One of the biggest disadvantages was HR-related issues,” Choubey said. “There have also been advantages. One engineering department now services aircraft of both AI and erstwhile IA. So, it’s been a mixed bag. There have been certain positives and negatives.”
Choubey, however, said the government wasn’t looking at reviewing the merger. On whether the two airlines shouldn’t have been merged, he said: “I won’t pass that value judgement. I would only say that if we were to do it we would have made sure that the HR issues are first handled and taken care of.”
The aviation secretary said he was confident that AI will make a net profit by 2019 “if oil prices remain soft”. AI and erstwhile IA saw a combined profit of more than ₹75 crore in 2005-06, but losses have mounted since. For the first time since the merger, AI posted an operational profit in 2015-16.
The carrier is likely to post an operating profit of around ₹100 crore in 2015-16. Net profit is operating profit minus taxes, interest payments and other costs not related to operations.
“I am confident that no further equity infusion over and above the one already approved in the turnaround plan will be required. We will get a net profit three years before the target date of the turnaround plan,” Choubey added.
The government has already pumped in over ₹21,000 crore of the promised ₹30,231 crore it plans to infuse into AI by 2021.
Will the government consider selling a stake or privatising AI after the airline has turned profitable? “At present, we are not looking at stake sale. What happens in 2019 is a decision that will be taken at that time,” the secretary said.
