What will happen to Air India employees? What about Maharaja logo?
Tata Sons will own Air India as it won the bid for ₹18,000 crore, the finance ministry announced on Friday. The total handover process involves many nuances and here is all you need to know.
1. The handover process will be completed by December 2021. The finance ministry is eyeing to close the transaction by December, which means by December Tata Sons will get the shares and the government will get the consideration.
2. There will be no restriction on Tata Sons regarding the future merger. Only the owner will have to maintain 51% equity.
3. The current employees of Air India will be retained for one year. There will be no sacking, the ministry said.
4. The winning bidder has to retain all employees of Air India for one year. In the second year, if the new bidder sacks anyone, they will have to be paid VRS.
5. All employees will get gratuity and provident fund and post-retirement medical benefits.
6. This one-year protection for employees is not absolute. There are issues like performance, conduct etc. Air India at present has 12,085 employees, including 8, 084 permanent employees. Air India Express, on the other hand, has 1,434 employees.
7. Air India brand has eight logos. The new owner can't transfer these logos at least for five years. After five years, they can transfer the logo but only to an Indian entity. The logos of the Air India brand can never go to any foreign entity, the government has specified.
8. Can Tatas now scale down the operation if they want? The government said the Tatas have 100% stake so they can actually take any decision on the business. But there is a 3-year business continuity clause that says the new owner will have to continue the business for three years.
9. The restriction that government employees will have to travel by Air India will now go because that was for Air India in government hands.
Ratan Tata on Friday welcomed Air India in his company's fold and said the airline provides a very strong market opportunity to the group even though it will take considerable effort to rebuild the debt-laden carrier. “While admittedly it will take considerable effort to rebuild Air India, it will hopefully provide a very strong market opportunity to the Tata Group's presence in the aviation industry,” he said.