CCEA to discuss AI wage bill this week

New Delhi: Air India may start its wage negotiations afresh, as the Cabinet Committee on Economic Affairs (CCEA) is likely to take up the issue of rationalisation of its pay bill in its meeting this week.
“The (proposed) equity infusion of Rs 1,200 crore may also get clearance this week,” said a ministry official, who did not want to be identified.
The state carrier, with 31,000 employees, has an annual wage bill of Rs 3,200 crore. The airline had earlier been asked to cut this, to get the second tranche of equity infusion of Rs 1,200 crore.
AI is looking at linking incentives to the amount of work done. “This would increase productivity of the airline, which is negative now,” said a senior AI official.
Earlier attempts by the airline to push through proposals to cut productivity-linked incentives by half, which would have saved around Rs 700 crore annually, met with stiff opposition from the unions.
Among other decisions, the CCEA may also clear the formation of strategic business units (SBUs) in engineering and maintenance, repair and overhaul. “This will help the airline in making new profit centres and also decrease their excess employees by transferring them to these SBUs,” said an AI official.
However, AI’s ground-handling subsidiary did not take many employees from the parent company. It preferred to hired people from elsewhere on contract, as that was 50 per cent cheaper.
13/12/10 Business Standard

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Categories: Air India Dec 2010