Air India may scale down employee pay cut plan

 National carrier Air India may review its plans to cut 50% performance-linked incentives of its 32,000 staff across the board, and 

instead consider a graded cut in the range of 20-50% based on employee salaries. 



A wage restructuring committee, set up by the airline s CMD Arvind Jadhav, presented a wage cost reduction plan last week to the company board, said an official in the civil aviation ministry, requesting anonymity. 



“The committee has proposed to cut PLIs in the range of 20-50% depending upon employees’ total salary. A final decision is yet to be taken,” said an official, who attended the board meeting. 



By slashing 50% PLIs of its work force, the company could save about Rs 750 crore of its about Rs 3,000 crore annual wage bill. The airline’s proposal to effect 50% across-the-board cut in PLIs had last month met with resistance from employee unions. 



The Aviation Industry Employees Guild (AIEG) and the Air Corporation Employees Union (ACEU) went on a hunger strike to protest against the move. The two unions represent over 50% of the airline’s total staff. 



“Our average PLI per month ranges from Rs 2,500-8,500. We have strongly objected any cut in the incentive, as our salary is very low,” said ACEU chairman (Delhi region) Surander Kumar. 



A bailout package to save loss-making airline by the government has made it conditional for Air India to save on costs and enhance revenue. Air India is estimated to have an accumulated loss of over Rs 7,200 crore as on March 31, 2009. 



A high-level committee of secretaries (CoS), headed by cabinet secretary KM Chandrasekhar, recently agreed to an equity infusion of Rs 5,000 crore into the troubled airline. The capital infusion is expected over a period of three years.