Air India Plans To Furlough Employees For Up To Five Years To Trim Costs
An Airbus SAS A321 aircraft operated by Air India Ltd. approaches to land at Chhatrapati Shivaji International Airport in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Air India Plans To Furlough Employees For Up To Five Years To Trim Costs

Air India Ltd. has approved a scheme through which it would send its employees on compulsory leave without pay as the debt-ridden carrier seeks to cut operational costs in its bid to search for a buyer.

The scheme, known as leave without pay or LWP scheme, involves sending employees of India’s third-largest carrier on furloughs for durations ranging from six months to two years, which can be extended to five years, according to an order. BloombergQuint has reviewed a copy of the order.

The chairman and managing director of Air India has been authorised to send employees on leave on the basis of factors like suitability, efficiency, competence, quality of performance, health, instances of non-availability in the past due to sickness or otherwise and redundancy.

A panel will be formed by regional directors of the carrier, comprising the general managers of personnel and finance and the department heads concerned to scan employee records and recommend names of the individuals to obtain compulsory leave, the order said.

The government has put up for sale its entire stake in Air India—which has a debt burden of around $8 billion—its subsidiary Air India Express Ltd. and 50% holding in Air India SATS Airport Pvt. for the second time. The last date for submission of bids got extended to Aug. 31 following the Covid-19 outbreak.

Employees opting for the scheme, according to the order, won’t be able to opt for jobs in any state-run enterprise and must inform the carrier if they’re working for any other company within India or abroad.

The employees who wish to opt for the scheme voluntarily will have to apply within Aug. 15 and their services will be terminated if they don’t report to work on the date of expiry of the leave.

Employees opting for this scheme won’t be eligible for postings abroad and promotions for one year after the leave period. They will also be unable to avail any other leaves during the LWP period, the order said.

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