Air India resolution puts Jadhav in a bind

Mumbai: Air India’s pilots returned to work on Wednesday after the government intervened to suspend incentive cuts, but the conciliatory move may push chairman Arvind Jadhav, struggling to save money at the loss-making national carrier, into a corner.
National Aviation Co. of India Ltd, or Nacil, which runs Air India, lost more than Rs100 crore of revenue in the five days since Saturday when at least 200 executive pilots went on strike, protesting against the proposed cut of as much as 50% in productivity linked incentives, or PLIs.
“Air India's chairman was let down by the government,” said M.S. Balakrishnan, former director of finance at Indian Airlines. “Now he will not be able to turn around his airline as he could not effect any wage cut.”
The government’s rescue plan for the airline depends on the success of a cost-cutting programme, a key element of which has been stopped in its tracks.
The pilots were assured by the management that there would be no reduction of salaries, he said.
This has severely curtailed Jadhav’s space to manoeuvre.
“Even if the employees concede for a 10% to 15% reduction during the deliberations of the newly set up committee, that will not give any significant savings to Air India,” said Balakrishnan, the former Indian Airlines official. “If he wants to turn around the carrier, either he will have to reduce the employee strength by 30-35% or (make an) equivalent reduction in wages.”
30/09/09 P.R. Sanjai/LiveMint

To Read the News in full at Source, Click the Headline

Categories: Air India Domestic Oct 2009, NACIL Oct 2009