Broad salary cut at Air India unlikely

New Delhi: The ministry of civil aviation is now veering around to the view that an across-the-board reduction in salaries of Air India employees would be difficult to implement.
"It isn't fair to announce an across-the-board salary reduction. We have now realised that we will have to do a complete overhaul of the salary structure, wage agreements, etc to arrive at a fair picture," ministry sources said.
According to the sources, the current Air India (formed after merger of erstwhile Indian Airlines and erstwhile Air India) has two distinct sets of employees: employees of erstwhile Indian Airlines (IA) draw far "lower" salaries compared with employees of erstwhile Air India (AI).
Going by official sources, IA the salaries of IA employees are indexed to flying hours, but those of the AI employees are not based on this criterion.
Reduction in salaries and performance linked incentives is crucial to the comprehensive restructuring plan AI has drawn up in a bid to get government support. The airline has sought Rs 5,000 crore equity from the government and as an interim measure, Rs 800 crore is expected to be given.
But now, given the sensitivity of the salary issue coupled with the urgency with which the ministry has to send a note to the Cabinet Committee on Economic Affairs (CCEA) seeking the Rs 800 crore initial equity support, a quick decision on wage revision appears unlikely.
The Rs 800 crore equity support was recommended by a group of ministers and is conditional to the airline showing savings of Rs 2,000 crore by 2010.
30/11/09 Sindhu Bhattacharya/Daily News & Analysis

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Categories: NACIL Nov 2009