Patel asks Cabinet to take a call on Air India wage cuts

New Delhi: Civil Aviation minister Praful Patel, who held a series of meeting with the government’s senior leadership, to canvas support for Air India, has another hurdle to cross ahead of the Cabinet meeting tomorrow. He is scheduled to meet Heavy Industries and Public Enterprises (HIPE) minister Vilasrao Deshmukh prior to the meeting to seek his ministry’s support.
The Department of Public Enterprises (DPE) has raised an objection to the ministry’s proposal stating the airline has incurred losses for the last three years, and hence qualified to be declared ‘sick’. The HIPE ministry has contended that the company should have informed the Board for Industrial and Financial Reconstruction (BIFR). “Air India has rejected DPE’s contention. National Aviation Company of India Limited (NACIL), formed after merging Air India and Indian Airlines, was registered three years ago. Under the BIFR rules, a company which is filing for a ‘sick’ status, must have been registered for at least five years,”a civil aviation ministry official said.
In its proposal to the Cabinet, the ministry has sought Rs 1,200 crore additional equity support and passed on the onus of taking a decision on wage restructuring to the Cabinet. Accepting that AI had made “little progress” in tweaking wages and allowance “due to the probability of industrial unrest”, it said that the AI management be allowed to renegotiate agreements with unions to ensure the anticipated savings on employees cost.
30/12/10 Amitav Ranjan/Smita Aggarwal/Indian Express

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Categories: Air India Dec 2010