Airline pins hope on immediate profitability of the two ventures
Sweta Ranjan | June 30, 2011
Two proposed subsidiaries of Air India (AI)are set to take off by the end of the year. A cabinet note on operationalising the subsidiaries for ground handling and maintenance, repair and overhaul (MRO) has already been forwarded to the cabinet secretary for circulation so that the issue of equity infusion can be taken up by the cabinet committee of economic affairs (CCEA) in the next few weeks.
An Air India source said, "There is a strong possibility that the two subsidiary companies will get operationalised as soon as the government gives the nod in the near future." The airline has already floated the two companies Air India Air Transport Services Ltd for ground handling and Air India Engineering Service Ltd for aircraft maintenance.
The source claimed that this step would help in the revival of the Air India and both subsidiaries would be able to earn profits right from the first year itself.
"In a move to restructure ailing carrier’s balance sheet, cash-strapped national flag carrier Air India will shift at least 50 per cent of its work force to two new strategic units that will take care of ground handling and engineering. This will help in releasing the burden of the parent company," airline executives say.
Ground handling includes general administration, baggage, freight and mail handling, and the engineering division takes care of maintenance, repair and overhaul (MRO) of aircraft bodies and engines.
"Around 11,000 employees will be transferred to the engineering unit and 7,500 will be shifted to ground handling subsidiary. The engineering and ground-handling businesses will get functional as separate entities immediately after the government gives its green signal," the AI executive said.
According to experts, the transfer of employees to new subsidiaries may witness agitation by workers but the step will help in revival of the parent company.
"In 1996 also, Air India had identified a few separate units like the jet engine overhaul shop and the central training establishment of the airlines as profit centers, but nothing could be achieved in this direction," said a senior pilot of Air India.
The subsidiary companies will be mandated to provide service not only to Air India but also to the other airlines. A source explained, "For example, if Kingfisher sent its aircrafts to Atlanta for maintenance, servicing takes around 6 to 9 days but if our subsidiary units are available in India it would only take 2 days for any aircraft to avail the service." He adds, "This way the two units will start earning from the very first day of staring its operations."
The bases for these units will be Delhi, Nagpur, Trivandrum and Mumbai and more bases would get operational in the next phase. The four bases of the first phase will have the maintenance capacity of approx 300 aircrafts.
The two new subsidiaries have also submitted their own business plan to the government.
Maharashtra chief minister Uddhav Thackeray has launched three state-of-the-art human DNA units under the Nirbhaya Scheme for efficiency in criminal investigations. A wildlife DNA unit in Nagpur makes Maharashtra the country’s first state to have a forensic testing lab for animals.
The Midway Battle: Modi’s Roller-coaster Second Term By Gautam Chintamani Bloomsbury / 400 pages / Rs 699 Gautam Chintamani, a film historian and author, has penned an in-depth chronicle of prime minister Narendra Modi’s second
Maharashtra chief minister Uddhav Thackeray has instructed the Mumbai civic authorities to take immediate action on unauthorized constructions on war footing. In a virtual meeting held on Wednesday, Thackeray said no illegal construction will be tolerated in Mumbai and called upon the BMC to
After extending timings of shops and restaurants as well as the reopening of cinema halls and theatres under specified SOPs from October 22, in view of the festive cheer, the Maharashtra government has allowed restaurants and eateries to remain open till 12AM and shops and establishments to function till 1
Rubbishing the recently released Global Hunger Index 2021, wherein India has slipped to 101 position to be placed below Pakistan, Nepal and Bangladesh, Arvind Panagariya, professor of economics at Columbia University and former vice chairman, NITI Aayog, has said that data collection and methodologies used
A long life span free from diseases and disability, the so-called healthy aging, has been a matter of prime interest to humanity. It is widely held that the life expectancy is a function of interplay between various genetic and environmental factors. There is scientific evidence to support the fact that on