Aviation ministry plans 20% wage cut for Air India staff

New Delhi: The civil aviation ministry is likely to propose a 20%, across-the-board wage cut for Air India (AI) employees. It is in the process of preparing a cabinet note on AI, which will include cost-saving measures and a roadmap. The wage cut proposal may figure in this communication. The note may be submitted by mid-April.
The wage cut figure is being discussed after plans to reduce salaries of AI employees failed, including a proposal to cut performance-linked-incentives (PLIs) by 50% in September 2009.
Having faced roadblocks in implementing wage cuts, the ministry had decided earlier this year to refer “painful” decisions to the cabinet and it is likely that civil aviation minister, Praful Patel, will discuss this and other proposals related to AI’s turnaround informally with finance minister Pranab Mukherjee and cabinet colleagues before submitting the note.
The wage cut proposal is being mooted despite criticism by the parliamentary committee on public sector enterprises (Copu) on this matter. In its report, which was submitted to Parliament recently, Copu said manpower-related costs account for only 16.2% of AI’s cost structure.
05/04/10 Sindhu Bhattacharya/Daily News & Analysis

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Categories: NACIL Apr 2010