A-I gets govt nod for wage revisions

New Delhi: Major progress has been made in Air India’s attempts to cut costs, with the Committee of Secretaries (CoS) giving its board permission to rework wage agreements and the airline’s dozen-odd unions adopting a more accommodating stance on the issue.
The CoS, headed by Cabinet Secretary K M Chandrasekhar, has also decided to set up a committee overseen by additional secretary, expenditure, Vilasini Ramachandran, and key finance ministry officials who have been asked to work out a financial package.
To support the state-owned airline, aviation ministry officials have also formulated a new policy, making it mandatory for all central government employees to fly only Air India, a move that will guarantee assured business of around Rs 1,000 crore a year.
The CoS is also considering an extension of the order to all public sector undertakings, though this would require the clearance of all administrative ministries concerned. Ministry officials hope this will bring another Rs 500 crore of business to the airlines.
These decisions of the CoS, which was mandated by the government to prepare a rescue package for the airline, was taken at its meeting last Saturday and is expected to meet an informal annual cost-cutting target of Rs 1,000 crore that will also cover the Rs 3,000-crore wage bill.
The unions, meanwhile, say they are ready to negotiate new terms based on productivity but cannot be pulled up for the airline’s Rs 5,000-crore losses.
31/07/09 Surajeet Das Gupta & Mihir Mishra/Business Standard

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Categories: NACIL Jul 2009