Air India privatisation: Airline puts employee contract renewals on hold

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

Choose Stock Exchange: BSE LIVE NSE LIVE

26 Aug, 2025 12:21

Volume

Todays L/H

More

×

State-run Air India has put the upcoming renewal of employee contracts on hold as the government charts its course for its disinvestment, reports Livemint.

All renewals, except for operational or licensed category have been put on hold, V Hemjadi, director, personnel and finance of the airline told top management in a letter dated August 30.

“All proposals received for the post-retirement engagement of employees and renewals may be kept in abeyance till further orders except for operational/licensed category which has to be put up through personnel department,” the letter said.

The letter is marked to Air India's new chief Rajiv Bansal, who took charge last month, the report said.

Bansal, who has been given a three-month tenure initially, will have to take some tough calls, a source told Mint. Bansal is the additional secretary and financial advisor in the petroleum industry and currently holding additional charge of Air India.

The government, in three months, will decide who will take charge of the airline subsequently, civil aviation secretary Rajiv Choubey had said last month.

In June, the Union Cabinet had given an in-principle nod for disinvestment of the debt-laden Air India and its subsidiaries.

Last week, ministers led by Finance Minister Arun Jaitley held a second meeting to discuss the airline's privatisation plans. The committee will soon appoint transaction advisors for the process, Jaitley said on Wednesday.

Air India is reeling under debt of nearly Rs 52,000 crore. Of this, about Rs 28,000 crore is working capital debt. Despite receiving a Rs 24,000 crore bailout package, the airline has failed to turn its fortune.

The government is likely to divest Air India’s subsidiaries separately and hopes to complete the carrier’s disinvestment plan before the end of current year.

Two companies - IndiGo and Bird Group - have already expressed interest in buying certain businesses of the carrier. While IndiGo is eyeing Air India's international operations, Bird Group has shown interest in acquiring the carrier's ground handling business.

On August 31, Air India concluded auctioning of its 14 properties located in different parts of the country. The airline is looking to divest its non-core assets.

Nearly 30 properties valued above Rs 500 crore will be auctioned by first week of September by MSTC Ltd, the state-run auctioneer.

"We have received good bids for the properties that were put up for auction today. We got bids above the reserve price for 10 out of the total 14 properties," Air India CMD Rajiv Bansal told PTI.

"The proceeds from this will go towards paying our debts, although these are baby steps," he said.