Air India to fix incentive cut quantum Tuesday

November 17th, 2009 - 4:56 pm ICT by IANS  

Pranab Mukherjee New Delhi/Mumbai, Nov 17 (IANS) The Air India management is expected to take a call Tuesday on the quantum of reduction of performance linked incentives (PLI), which constitutes a major chunk of the salaries of its 31,500 employees.
“We are looking at adjusting cuts in PLI that is acceptable to all. I think it should be less than 50 percent,” said a senior official of the carrier, which incurred a loss of Rs.7,200 crore last fiscal.

The Air India board is meeting in Mumbai Tuesday to discuss the quantum of PLI cuts for the airline’s employees, who have been paid salaries for October but without the incentives.

The board had in August proposed slashing incentives by 50 percent, hoping to save at least Rs.700 crore a year as it struggles to come out of its worst financial crises.

To be the hardest hit due to the PLI cut are the carrier’s 1,250 pilots and at least 7,000 engineers.

PLI accounts for about 75 percent of pilots’ salaries.

Just before the board began its deliberations Tuesday, they staged a silent protest march at Mumbai airport. “We can’t continue working for peanuts. If the management doesn’t favour us, we will protest rather than work,” said a pilot.

The Indian Commercial Pilots Association (ICPA), which claims to have a membership of over 800, has also threatened to go on strike from Nov 24 if dues were not cleared.

The cash-strapped carrier is now desperately looking at increasing revenues and its market share.

Its domestic market share, which was 16.6 percent in August, rose to 17.5 percent in September and climbed to 18.6 percent last month.

In a revenue shoring move, it also hiked domestic fares by up to Rs.200 following increase in jet fuel prices.

Late last week, Civil Aviation Minister Praful Patel said the government had agreed to infuse Rs.800 crore of equity into Air India.

Based on a monthly review of Air India’s cost-cutting measures, the Group of Ministers (GoM) on Civil Aviation, led by Finance Minister Pranab Mukherjee, recommended the equity infusion.

However, it also asked Air India to reduce costs by at least Rs.2,000 crore by the end of the current fiscal.

The airline has posted a loss of over Rs.5,500 crore till now this fiscal.

Tags: , , , , , , , , , , , , , , , , , , ,

Posted in Business |

Subscribe