Ministry divided over AI wage cut

New Delhi: The aviation ministry is divided over the most contentious issue in reviving the Air India-Indian Airlines combine — wage reduction. Aviation ministry's top officials say renegotiating wage agreements with unions representing the national carrier's 31,000 employees is a must to ensure the success of any turnaround plan. They are aiming at a cut of Rs 800 crore in the Rs 3,000-crore annual wage bill.
However aviation minister Praful Patel told TOI on Monday that there was no move to cut wages, reiterating his position that was made clear at a recent AI board meet in Mumbai. "This is nothing but loose talk. Cutting wages is not on the agenda as there are other ways of cutting costs," he said.
But, senior ministry officials pointed out that Nacil's wages and manpower are way higher than the domestic airline industry norms. "Being a PSU, layoffs are out of question. But given the financial health of the airline, wage cuts are necessary. After all it's better that employees keep getting a slightly lower wage regularly than not getting the higher figures for very long. but such a thing can be done only with the nod of the highest level of government, the Cabinet," said a senior official.
The merged airline, National Aviation Company of India Ltd (Nacil), is battling to survive critical illnesses like a working capital loan of Rs 18,000 crore along with accumulated losses of Rs 14,000 crore.
24/08/10 Saurabh Sinha/Times of India

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Categories: NACIL Aug 2010