Mumbai: The Aviation Industry Employees’ Guild, a staff union of National Aviation Co. of India Ltd (Nacil) that runs Air India, on Friday demanded an inquiry by the Central Bureau of Investigation (CBI) into the airline firm’s projected losses of Rs5,000 crore for the fiscal year ended 31 March.

The union said it would not co-operate with cost-cutting measures suggested by a turnaround committee since the management failed to keep its promise of paying June salaries by 3 July to at least half of its workers.

The firm’s turnaround committee is meeting on Friday to discuss a plan to revamp the carrier and cut costs. A spokesperson declined details, saying it is one among several internal meetings.

The committee, which includes government and management representatives, is to suggest cost-cutting proposals at the meeting, which was continuing at the time this story was filed.

George Abraham, general secretary of the guild, said his union did not take part in the meeting as the management did not disburse salaries as it had promised. “We have several inputs to give to CBI regarding the losses made by Nacil,” he said. “The management is hiding the actual reason by punishing employees by not giving salaries.”

“At the time of merger (of overseas flag carrier Air India and domestic airline Indian Airlines), we were told by consulting firm Accenture that Nacil would make a profit of Rs650 crore,” the union leader said. “Suddenly, what drastically went wrong in the airline to post a loss of Rs5,000 crore?”

D.K. Shetty, president of Air Corporation Employees Union, the largest workers’ group in the airline, said: “Any decision on cost reduction measures will not be binding on us as the management has not kept its promises to disburse salaries on the agreed date.”

In a separate development, chairman and managing director Arvind Jadhav said in a communication to employees: “It is of paramount importance that while we take steps to reduce our operating costs and sacrifice some of the privileges... we also need to exercise a choice between austerity and oblivion.”

He said that besides wages, fuel costs and bank liabilities have to be paid on time to keep the airline functioning. “Considering the critical financial state of the airline, we should all be prepared to face the impact of harsh decisions that will be required to be taken in the coming weeks to meet the current difficult financial situation.”