Air India has temporarily suspended the proposals for renewal of employee contracts and post-retirement engagement of employees, even as the government pushes for the airline’s privatization, according to a Livemint report. 

In a letter to Air India’s top management on August 30, V. Hejmadi, director, personnel and finance of Air India was quoted as saying: “All proposals received for the post-retirement engagement of employees and renewals may be kept in abeyance till further orders except for operational/licensed category which has to be put up through personnel department”. 

The letter was reportedly marked to Rajiv Bansal as well, who replaced Ashwani Lohani to become Air India’s new chairman and managing director late last month. Bansal, who is already serving as the additional secretary and financial advisor in the ministry of petroleum and natural gas, will hold this charge "for a period of three months or until further orders, whichever is earlier," according to the order issued by the government.

The report also added that Air India has been unable to hire management staff for a long time, and that it typically engaged people who were retiring from the same departments as consultants, to keep things moving. With this new order, however, that cannot happen now.

Meanwhile, a team of Union ministers led by finance minister Arun Jaitley had its second round of discussions around Air India’s privatization. The team decided to appoint transaction advisers for the divestment, after deliberating for nearly an hour.   

In line with this latest development, former chairman Ashwani Lohani (who is now heading the Railway Board) had earlier asked the company employees to prepare themselves for the incoming ‘corporate culture’, in a letter addressed to them. “The complexities of working in a PSU environment would get replaced by a corporate culture, a culture in which merit would get a better deal. This should enable a full realization of the inherent potential of your airline besides creating an environment that would indeed be conducive for all of us who are used to working hard with commitment and integrity," he wrote in the letter.