Want bailout? Trim wages: Cabinet tells national carrier

Mumbai: The government has given a green signal to the Air India management on the sensitive issue of wage rationalisation of its employees.
The cash-strapped carrier has been asked to ‘work towards’ trimming the wage bill — one of the key milestones in the airline’s revival plan. Approving Rs 1,200 crore bailout installment, the cabinet withheld decision on the operationalisation of Strategic Business Units (SBUs). At almost Rs 3,000 crore per annum, Air India’s wage costs comprise 17 per cent of its overall operating costs. The airline had earlier drawn a plan to cut wages by Rs 500 crore but was able to achieve only Rs 100 crore saving on this account. In its proposal, the airline had accepted that it had made little progress in achieving wage rationalisation goals. The Cabinet Committee on Economic Affairs (CCEA) cleared Rs1,200 crore as equity infusion in the loss-making carrier in its meeting on Thursday.
31/12/10 Indian Express

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Categories: Airports Dec 2010