AI plans to save Rs 500 cr in wage bill

NEW DELHI: With the aim of reducing its employee cost by Rs 500 crore annually, loss-laden public sector carrier Air India will examine its existing wage agreements with its unions, representing nearly 31,000 employees, and review all performancelinked incentives (PLI) and flying allowances.

The company has formed a four-member committee comprising members from finance and personnel to look into the wage structure and suggest ways of cutting the flab.

Air India is estimated to have incurred losses of over Rs 3,000 crore in 2008-09 and is looking at financial help from the government to tide over the crisis. The country���s largest air carrier by fleet size has an annual wage bill of about Rs 3,000 crore of which Rs 1,400 is the performance-linked incentive. The company has a cumulative loss of about Rs 5,300 crore.

Civil aviation secretary M Madhavan Nambiar, the company CMD Arvind Jadhav and financial advisor in the ministry E Bharat Bhushan met Prime Minister Manmohan Singh���s principal secretary TKA Nair on Monday to discuss the airline���s proposal seeking government fund infusion.

���Air India, which has not resorted to retrenchment or layoffs till date to tide over the financial crisis arising out of difficult market conditions affecting airlines world over, has constituted a four-member committee comprising officials of HR and finance to examine the wage agreements, including flying allowances and productivity linked incentives, entered into between the management and unions, associations and guild,��� a company statement said.

The airline recently deferred the June salary of its staff by 15 days citing cash problem in the company. It also urged its top managers to voluntarily forego its July salary.