AI pays pilots, engineers illegal wages

Mumbai: Air India wants a bailout of up to Rs 15,000 crore from the government, but for three years it has paid some employees wages to which they were never entitled.
These wages were in the form of an incentive scheme and were often several times the basic salary. They were paid without government clearance and contributed to its worsening finances: Its accumulated losses are Rs 7,200 crore as of end-May.
“These illegal payments should be recovered from them,” a union leader said on condition of anonymity.“The productivity-linked incentive scheme of Air India has not been approved by its board or by the government,” SK Chhikara, undersecretary in the ministry of civil aviation, had written to the airline in end-2008.
HT is in possession of documents that show that the airline ignored government directions asking it to stop these payments.
All employees except pilots and cabin crew are entitled to payments under the scheme, but aircraft maintenance engineers and service engineers have been the main beneficiaries of the largesse.
Here’s just one example of how Air India is making payments under the productivity scheme. Maintenance engineers get a Rs 9,000 per month allowance, called “qualification pay”, for the approving the airworthiness of particular types of aircraft. Most maintenance engineers in Air India are paid Rs 54,000 per month for “approving” six types of aircraft.
The catch: Air India operates only four types of aircraft.
Executives (engineers who have risen up the ranks) also get paid when they do no certification at all. The Comptroller and Auditor General, the financial watchdog for government organisations, had questioned this scheme in 2008. Air India declined to share details of incentive payments or reveal its share in the Rs 3,000-crore annual wage bill.
According to norms laid down by the Department of Public Enterprises, which oversees public sector units across the country and fixes the remuneration of public sector employees, allowances should not exceed 50 per cent of the basic pay of any employee.
"But in several cases, the incentive component is several times the basic salary and could be Rs 2 lakh per month for an engineer or an executive,” said a senior airline official.
30/06/09 Lalatendu Mishra/Hindustan Times

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Categories: NACIL Jun 2009