Air India chief asks employees to accept salary cuts

Last Updated: Wednesday, August 26, 2009 - 21:54

New Delhi: Faced with a grim scenario, Air
India management has asked its employees to consider the
financial crisis facing the company and accept proposals to
cut wages and other costs in order to avoid job losses.

The views were expressed by Air India CMD Arvind Jadhav
at his meetings with leaders of 14 unions till late last
night, where he is understood to have articulated various
scenarios which could arise if costs were not managed well.

Airline officials said Jadhav also told the union leaders
that if the losses continued, the company would have to prune
its operations which could lead to lay-offs and retrenchments.

However, the officials categorically denied any move for
a lockout or referring the company to the Board for Industrial
Finance and Reconstruction, saying at no stage of these
discussions were any such references made.

While the airline management announced timely payment of
salaries to its employees, it said determined efforts would be
made to overcome the liquidity crunch and cut down costs,
particularly in areas like rentals for leased aircraft, jet
fuel, navigation charges and interest payments on fleet
renewal.

Jet fuel costs amount to almost 40 per cent of the total
operational costs of the carrier, which is followed by
expenses on salaries, wages and various allowances including
productivity-linked incentives.

It is understood that during the talks, the airline
management proposed to merge PLI with the basic pay of various
section of employees and match them with the scales and
allowances recommended by the Sixth Pay Commission and in
accordance with the Department of Public Enterprises
guidelines.

At their earlier round of meeting in Mumbai last week,
the management had decided to cut incentive payments by half.

The cut, as per the proposal placed before the unions,
would be in effect till an alternative formula for governing
PLI was worked out within three months.

The formula governing incentives is to be linked to
the company`s performance in terms of on-time performance,
yield, seat factor, operating margins and profitability.

The meeting was held as the unions staged hunger strike
at various places across the country. However, most of the
unions have already decided not to go on a full-fledged strike
keeping in view Air India`s health.

Bureau Report



First Published: Wednesday, August 26, 2009 - 21:54

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