Recession Easing

AI staff will be redeployed, size to be cut by halfAI

staff will be redeployed, size to be cut by hal...
Govt approaches Ratan Tata for heading AI
Air India employees to get salaries by July 14
Air India employees to get salaries by July 14
New Delhi: The government is learnt to have decided on a largescale redeployment of Air India (AI) staff to its strategic business units (SBUs), cutting the airline’s current 33,000 strength by nearly 50 per cent.

This will bring down AI’s employees-per-aircraft ratio from a highly uncompetitive 230:1 to a globally accepted 100-150:1.

Minutes of Civil Aviation Minister Praful Patel meeting at the Prime Minister’s Office last month, available with The Indian Express, indicate that the decision was reached after detailed discussions on the carrier’s mounting losses and a presentation by Civil Aviation Secretary M Nambiar.

Top government sources told The Express that around 15,000 employees will be absorbed in the SBUs, which the government expects will become independent profit centres once they are operational.

“The two Maintenance, Repair and Overhaul (MRO) joint ventures with Boeing and Airbus will absorb around 5,000-6,000 employees. The ground handling joint venture with Singapore firm SATS is expected to absorb another 8,000-9,000. These SBUs will be hived off to become independent profit centres,” said a senior official.

For speedy operationalisation of airline’s subsidiary businesses, AI plans to re-designate an existing management position as Executive Director of Corporate Strategy.

AI CMD Arvind Jadhav has asked for finalization of employees service rules and regulations and performance-related standard operating procedures in order to fast-track the integration of the old Air India and Indian Airlines staff. The airline will draw up an action plan for the next 6 months, which will be part of the turnaround plan to be submitted to the government.

The Finance Ministry will review the pricing for aviation fuel, which accounts for 30-40 per cent of an airline’s operational costs and accord it ‘declared goods’ status. The move will bring down sales tax to 4 per cent, which is currently 24 per cent in some states. The Ministry will also ask government servants to fly only AI on official trips.

It was also decided at the meeting that the Petroleum and Natural Gas Ministry will intervene with oil marketing companies to provide a six-month credit line to the carrier.

AI will leverage its properties and other real estate assets to generate additional revenues and bring in cash, said an official. “It will also undertake rent-reduction,” he added.



Recession easing, recovery fragile: IMF


Recession easing, recovery fragile: IMF
Trade ministers gear up for Pittsburgh G20
US economy has ‘no bounce’: Buffett
Most economies in deeper slump: World Bank
Washington: The global economy is slowly starting to pull out of its deepest recession since World War Two but a recovery will be sluggish and policies need to remain supportive, the International Monetary Fund said on Wednesday.

In an update of its World Economic Outlook, the IMF said the global economy is likely to contract 1.4 per cent this year, a touch steeper than the 1.3 per cent decline it projected in April.

However, it now sees world growth strengthening to 2.5 per cent in 2010, compared to an April forecast of 1.9 per cent.

IMF chief economist Olivier Blanchard said forces dampening economic activity were easing in intensity but those pushing it up were still weak despite heavy government spending and central bank lending.

"This leads us to predict that while the world economy is still in recession, the recovery is coming but it is likely to be a weak recovery," Blanchard told a news conference.

He emphasized that confidence in the financial sector would not return until toxic debts were removed from banks' balance sheets and frail institutions recapitalized.

The IMF said conditions had improved more than expected as governments have pumped huge amounts of money into their economies and financial institutions, and warned against withdrawing fiscal and monetary support prematurely.

"Although exiting now would be premature, I think it's fundamental that we devise credible plans that map where we're going in the medium-term and how we're going to get there," said Jose Vinals, director of the IMF's Monetary and Capital Markets Department.

Vinals said addressing high public debt levels should be part of exit strategy plans, warning that sovereign debt markets may be destabilized if the burden on public sector balance sheets begins to be perceived as unsustainable.

A summit of Group of Eight leaders from industrial countries on Wednesday committed to withdrawing stimulus spending only when a recovery looked secure.

"All were of the view that the crisis is a long way from being over. With luck, we have reached the bottom," German Chancellor Angela Merkel told reporters at the G8 in the Italian town of L'Aquila.

BELOW-TREND GROWTH AHEAD

The IMF said while the world's advanced economies are expected to recover modestly next year, growth will remain below potential until later in 2010, suggesting unemployment will rise further.

It said the US economy will contract 2.6 per cent this year, slightly less than it thought in April, with growth resuming in 2010, albeit at a mere 0.8 per cent.
Source : http://www.financialexpress.com