India’s government is likely to make it easier for the new owner of heavily indebted Air India (AI, Mumbai Int'l) to cut its fleet size by selling off surplus aircraft currently inactive, anonymous officials told the Business Standard newspaper.

By extension, this would also mean being allowed to lay off significant numbers of employees, even though the airline’s privatisation rules say that the new owner will have to guarantee employment to the workforce.

“Looking at the prevailing conditions acting as a drag on the aviation sector, the new entity acquiring AI will be allowed to sell a few aircraft or return them to lessors. They are anyway grounded due to lack of demand. With some aircraft sold, the manpower requirement too will drop. Proportionately, there can be some layoffs,” Business Standard quoted an official as saying.

Air India is understood to have been pruning its staff numbers this year in preparation for the sale, but according to media reports the flag carrier together with its subsidiaries Air India Express (100% for sale in the privatisation like its parent) and engineering unit Air India Air Transport Services Ltd. (50% for sale) have around 9,500 permanent employees with an additional 19,000 on temporary contracts.

A preliminary memorandum puts the number of permanent employees per aircraft at Air India at 133, and 55 at Air India Express.

In total, the carrier operates 124 aircraft at least 43 of which are leased, and 27 of the fleet is currently inactive, the ch-aviation fleets advanced module shows.

In total, the fleet includes twenty-one A319-100s, nine A320-200s, twenty-seven A320-200neo, twenty A321-200s, four B747-400s, three B777-200(LR)s, thirteen B777-300(ER)s, and twenty-seven B787-8s. Also, Air India Express operates twenty-four B737-800s, eight of which are leased.

Another subsidiary, Alliance Air (India) (9I, Mumbai Int'l), which is not included in the privatisation deal, operates one ATR42-300 and eighteen ATR72-600 turboprops. Almost all of the aircraft in the subsidiaries are currently active.

If demand does not improve enough for the mainline carrier to reactivate all of its aircraft, the official said, it would be unviable to operate them, and rules to retain them would be relaxed.

The successful bidder will also gain control of 4,400 domestic and 1,800 international landing and parking slots at domestic airports plus 900 slots at airports overseas, Business Standard reported.

With the bids now in, the Indian government will announce a shortlist by December 28. Investors will then be notified by January 6 whether they qualify for the next stage, in which they will have to submit financial proposals.