New Delhi, July 18 (IANS) - National passenger carrier Air India's Chairman and Managing Director Ashwani Lohani on Tuesday reassured employees that their "genuine and valid interests" will be safeguarded during the process of divestment.
Addressing the employees in a letter dated July 18, Lohani said: "I would also like to reassure all my employees that during the process of disinvestment, the government and the airline management would like to safeguard your genuine and valid interests and ensure that suitable measures to this effect are put in place."
Besides, Lohani said the government's decision to consider divestment of Air India stemmed from the fact that the airline is unable to service its "huge accumulated debt of over Rs 50,000 crore".
"This huge debt has accumulated due to continuous losses over the years. You would however appreciate that unless a solution is found to this huge debt, survival in the long run is almost impossible and the proposal to consider disinvestment is a step in this direction," the letter read.
"It is the firm conviction of the government that the process of disinvestment is only meant to make Air India a much stronger world class airline capable of competing with others successfully. This would indeed be a win-win solution for employees."
Currently, Air India's portfolio of subsidiaries include Air India Engineering Services, Air India Transport Services, Alliance Air, Air India Express and the Hotel Corporation of India. It also has a ground handling joint venture AISATS.
At present, Air India and its subsidiaries have nearly 20,000 employees with 11,500 being on the company's payroll.
The letter comes after the June 28 decision of the Union cabinet which gave its in-principle approval for divestment of AI, whose debt has mounted to Rs 50,000 crore besides huge losses.
The Union cabinet's decision on Air India came after NITI Aayog in a recent report to the Civil Aviation Ministry recommended strategic disinvestment in the loss-making Air India.
The airline in 2015-16 had posted an operating profit of Rs 105 crore. For the last fiscal (2016-17), the company is expected to report an improved operating profit margin.
The flag carrier had got a new lease of life on April 12, 2012, when the previous central government under the UPA had approved a Rs 30,000 crore turnaround (TAP) and financial restructuring plans (FRP) package spanning up to the year 2021.
After the Union cabinet's in-principle approval for Air India's divestment, budget passenger airline IndiGo expressed its interest in participating in the stake sale of the flag-carrier.