Do Air India Employees Going to Hold 51% Stakes? At Least the Latest Reports Say So

As per the latest reports, Air India employees have formed a consortium to bid for the airlines in its bidding for sale. It might be the “first” such instance in the history of the corporate world of India if it comes into action.

0
Do Air India Employees Going to Hold 51% Stakes? At Least the Latest Reports Say So.the policy times

By now, we have come across the news that the government has decided to sell its 100% stakes in Air India citing the reason of “extreme losses” for the past few years. But the air india employees are adamant to somehow manage to save it from going to any private sector or individual as that can affect their employability massively. Thus, they formed a consortium of a total of 14000 employees that work with air India and plans to buy its 51% stake. They are also eyeing an investor who will be the 49% stakeholder of air India.

Massive debt burden on Air India

It’s not overnight that the government has taken the decision of selling the airlines to any private buyer/buyers. It was due for a long time, as the airlines have been running on loses for many years now. Shockingly, there has been a debt of almost Rs. 50000 crores on the airlines that need to be cleared as soon as possible. In 2018-19 only, the net loss of the airlines has been Rs 8556 crores approximately. This is a prominent reason why the government has decided to sell its 100% stakes as part of the “disinvestment” strategy.

Employees only to shell out 1 lakh per head to conquer the 51% stakes

The Air India employees are not too keen on letting go of their bread bearer easily. They are adamant to take control of the airlines and be the 51% stakeholder as well. There are currently 14000 employees in air India and if all of them pay Rs 1 lakh each then the total amount collected would be enough to bid for the sale that would make them 51%stakeholders. They also need to find an investor who will be the other 49% stakeholder of the airlines. December 14th is the last date for the bidding.

Also read: Over 200 casual workers of Air India move Bombay High Court seeking work after lockdown

Shortcomings of the plan

As against these employees and the investors, there are bidders who have better control over the matter. Tata Sons, Singapore Airlines, and Vistara have formed a consortium to bid for Air India and it can be tough to compete against them. Even if the air India employees manage to bid and conquer the rights, problems like managing the airlines would come up without a doubt. Choosing the CEO, the requirement of fresh funds, managing the debt, etc. are some issues that would require more planned efforts other than just holding the 51% stakes.

The Policy Times suggestion

  • The Air India employees are just being emotional and not practical with this decision. As there are many shortcomings with such a decision. Because then each employee will be equivalent to the owner of the airlines which will lead to confusion in terms of profit calculation and further investments as well.
  • It is desirable that they find good two or three investors who are willing to take over the airlines and then make some policies and agreements under which they can adhere to the fact that no existing employee shall be mulled off the job. This can be a good solution to their fear of losing their job with the airlines.

Also read: CIC asks Air India to disclose lease income from assets abroad

Summary
Article Name
Do Air India Employees Going to Hold 51% Stakes? At Least the Latest Reports Say So
Description
As per the latest reports, Air India employees have formed a consortium to bid for the airlines in its bidding for sale. It might be the “first” such instance in the history of the corporate world of India if it comes into action.
Author
Publisher Name
THE POLICY TIMES
Publisher Logo