Business - India;AI mulls temporary layoff of 15,000 for upto 5 yrs

HYDERABAD: Facing the heat of the financial crisis that has hit the aviation sector, state-owned Air India on Thursday said it is considering a plan
to give 3-5 years leave without pay to about 15,000 of its staff. ( Watch )

"We are planning to offer leave without pay for three to five years. We can consider it for about 15,000 employees," Air India CMD Raghu Menon said.

He, however, said those who take up the offer to go on leave would be taken back if they desire so at the same seniority and last drawn pay.

Menon's statement comes at a time when the country's leading private carrier Jet Airways has laid off 1,900 jobs as the financial crunch in the aviation sector worsens.

An official of Air India, who did not want to be named, said that a proposal for leave without pay could be brought before the company's board soon.

The government yesterday had, however, ruled out any job cuts in Air India with the civil aviation minister Praful Patel assuring employees that there were no plans to prune staff strength immediately.

"No...Air India is not going to have any job cuts. Certainly it (the aviation crisis) will affect the growth plans, it will affect the future employment opportunities which would have come the way of Air India in case the aviation industry was in a much better financial health," Patel said.

"But as of now I do not have the luxury to say beyond the fact that those who are working for the Air India shall continue to do so and we shall not have any issue of people being laid off," he said.

The 77-year-old state carrier, which initiated a fleet renewal programme three years ago and merged with its sister airline Indian last year, has proposed infusion of Rs 1,000-1,500 crore of equity capital.

It is also looking at soft loans of Rs 1,000 crore from government that can be repaid over a period of time.

According to industry experts the coming together of Jet and Kingfisher could further mount the problems for Air India.

Menon, however, disagreed with the views and said it would only lead to a reduction in competition. "There are a number of routes and there are a number of airlines. All the airlines will be evenly poised in the market," he said.