Air India may pare salaries to cut costs

New Delhi: Mounting losses have forced Air India to push for drastic pay cuts. The public sector company is planning to reduce the productivity-linked incentives (PLI) of its 34,000-strong workforce. The move is significant since PLI constitutes a significant portion of Air India employees’ salaries, up to 50% in some cases.
The airline is also working on plans to send employees on leave without pay for periods ranging up to five years. The aim of these measures is to save on costs and check losses.
The airline spends more than Rs.3,000 crore per annum on its wage bill and savings on this account is necessary to cut red ink on the balance sheet of the airline. Air India is facing losses to the tune of Rs 4,500 crore during 2008-09.
“A committee comprising members from finance, personnel and other departments has been formed to work out ways to rationalise the PLI component in the salary. The committee is expected to submit its report within a month. The idea is to find a practical way of calculating this part of the salary of employees and rationalise it,” an Air India official said.
In the wake of recent fuel price hike, the company took various measures such as cutting down flights on unprofitable routes, sending back leased aircraft, outsourcing of jobs and reducing employee perks and incentives.
12/09/08 Nirbhay Kumar/Economic Times

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Categories: NACIL Sep 2008