No wage cuts in AI recovery plan this year

New Delhi: After cracking the whip on strike-prone unions and their leaders, national carrier Air India is reaching out to its disciplined employees. The airline has decided against cutting wages this year. According to sources, the wage cut plans had envisaged a 15% saving from the annual salary bill of Rs 3,500 crore. The amount, however, was considered not worth the heartburn it would have caused among the employees.
“We will try to achieve this quantum of saving from some other front,” said a senior official. AI has accumulated losses of Rs 8,461 crore and an annual interest outgo of Rs 2,400 crore to fund the thousands of crores taken as loans to buy new aircraft. AI has 111 aircraft worth Rs 55,000 crore on order.
The airline got Rs 800 crore equity infusion from government last year and will get another Rs 1,200 crore this fiscal if the management is able to satisfy the Pranab Mukherjee-led group of ministers about its cost-cutting plans. AI’s cash losses have reduced substantially and its operating loss in 2009-10 fell to Rs 5,000 crore from Rs 7,000 crore . The airline is aiming to reduce cost by Rs 2,000 crore this year also through route-restructuring.
The government was keen that the management take the employees along in whatever recovery plan that is drawn up for the Maharaja, without tolerating any indiscipline of the kind seen after the Mangalore crash when a section of employees went on strike.
15/06/10 Times of India

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Categories: NACIL Jun 2010