Air India lays off 17 employees in S'pore office
Ven Sreenivasan
Fri, Jun 04, 2010
The Business Times

(SINGAPORE) Air India yesterday laid off 17 of its employees at its Singapore office in what could be part of a worldwide staffing restructuring following several years of losses and two years after its merger with Indian Airlines.

The airline's Singapore country manager was tight-lipped when contacted yesterday. But she nevertheless confirmed there had been staff retrenchments.

The airline, together with its budget carrier Air India Express, operates eight flights a day between Singapore and destinations in India.

Then there are the services of Indian Airlines, which was merged with Air India in 2007, resulting in the formation of new company called the National Aviation Company of India Limited (NACIL).

NACIL now operates Air India, Air India Cargo, Air-India Express, Indian Airlines and Air India Regional.

Industry sources here told BT that Air India had recently also called for tenders to operate its GSA in Singapore, which until now has been Serangoon Travel. This has fuelled speculation that the loss-making airline is trying to cut costs and outsource most of its services.

Airlines and other businesses in India often have huge difficulty laying off staff due to strong union and legal issues. But such obstacles do not exist in offshore bases.

Faced with cut-throat competition at home and a depressed operating environment abroad, the cash-strapped national carrier last year triggered labour unrest with plans to slash its annual salary bill by five billion rupees (S$150 million) to stay afloat.

That move in June 2009 came just days after the airline deferred payment of the salaries of its 31,500 employees by 15 days and asked top executives to forego a month's pay.

Air India's annual wage bill is over 30 billion rupees (S$900 million).

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