AI proposes 15-17% pay cut for most staffers

After stiff resistance from its employees against a steep pay cut, National Aviation Company of India Ltd (Nacil), which runs Air India, has come out with a fresh proposal to impose a 15-17 per cent cut on the total salary package.
The total package includes basic salary, dearness allowance, house rent allowance and payments made under the productivity-linked incentive scheme (PLI) . The cut, however, would not be applicable on employees (about 4,000, according to unions) who have a gross salary of less than Rs 20,000 a month.
The new proposal, which has to be cleared by the Cabinet, comes a few months after the airline had made an attempt, since aborted, to push through a plan for a 50 per cent reduction in PLI across the board for its 32,000 employees. That plan was targeted to save Rs 600 crore. But, it wasn’t pushed through because of stiff opposition from the employees.
PLI constitutes 40 per cent of the company’s total annual wage bill of around Rs 3,000 crore. The cut proposed by the new offer is much lower; the earlier one would have cut the salary package by 20 per cent.
The cut in salary would be the key in ensuring the airline is able to raise Rs 1,870 crore from internal resources, a nine-fold increase of what it has been able to rustle up in 2009-10 (only Rs 202.4 crore). Even in 2008-9, the airline had generated only Rs 429 crore from internal resources.
04/03/10 Mihir Mishra/Business Standard

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Categories: NACIL Feb 2010