Thursday, July 21, 2011

Air India employees may face wage cut

Air India employees may have to take a wage cut as part of the struggling national carriers turnaround plans. Civil aviation minister Vayalar Ravi has told the 14-odd employee unions of the airline that the government expects employees to contribute towards reviving the loss-making airline.


I told them (unions) that the bankers , the management, the aviation ministry and the government are all making sacrifices to help the air carrier , Ravi told ET. Then, it is only fair that the employees should also contribute to their companys turnaround ars guild guidesnd not abandon it in crisis. Employee unions are interpreting his words, conveyed during a twoday meeting over Wednesday and Thursday,  as an impending wage cut.
Some amount of wage cut seems imminent to union heads after the meeting with the minister, a senior Air India official said requesting anonymity. And the employees, particularly the lower-rung workers, are open to it, according to George Abraham, general secretary of Air-India Employees Union Guild, one of the larger unions of the airline. A group of ministers (GoM) is scheduled to meet on July 18 to decide on the fate of the cash-strapped airline , which has run up Rs 44,000 crore in debt and has accumulated losses of Rs 15,000 crore.
At his meeting with the unions, the minister allayed fears of privatisation of the national carrier and job cuts. Ravi said he will hold a third round of meeting with the unions after the group of ministers meet, and ask them how the employees have decided to contribute to the airlines financial turnaround. Air-India Employees Union Guilds Abraham said the company management too had sounded out unions about possible salary cut.
We have been thrown options like foregoing 2-3 months salary or part of the performance-linked incentive (PLI) until the airline becomes profitable ,  or increasing productivity in this way or that by the management before, he said. Abraham said it is not the lower rungs of the workers but the highly paid employees who are opposed to such a move, reminiscing the pilots strike in May for higher salaries. Air India has 30,000 permanent workers and about 8,000 contract employees and its annual wage bill is more than Rs 3,000 crore. The airline has been finding it difficult to pay salaries on time. The salaries for April and May were paid only in mid-June . Air India also owes Rs 3,700 crore to oil marketing companies towards jet fuel and more than that to different airports in various fees.

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