Air India to cut employee costs by Rs500 cr a year

Air India to cut employee costs by Rs500 cr a year
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First Published: Mon, Jun 22 2009. 03 30 PM IST
Updated: Mon, Jun 22 2009. 03 30 PM IST
New Delhi: Air India is working on plans to reduce its expenditure on employees by Rs500 crore per annum, with a newly formed committee re-examining wage and other agreements in consultation with the Unions.
The cash-strapped airline’s employee cost currently is over Rs3,000 crore annually, a company spokesperson said, adding that the airline was now targetting a reduction in employee cost to the tune of Rs500 crore per annum.
At present, the merged carrier has around 31,000 employees.
One of the six panels set up recently is the cost rationalisation committee, comprising officials of human resource and finance departments.
The committee has been directed to discuss cost rationalisation and reduction of wasteful expenditure with employees’ unions and submit its report by 15 July.
The spokesperson said that the committee would examine the wage agreements, including those relating to flying allowances and productivity-linked incentives.
The five other committees that have been formed are the committee on integration, committee on green initiatives, committee on safety, committee on customer feedback and route rationalisation committee.
The management has held at least two rounds of talks with various Air India employees unions in this regard, with the union leaders coming up with several suggestions to cut costs.
The spokesperson said the company was looking at improving productivity of employees, eliminating restrictive work practices and reducing wasteful expenditure.
He said the airline would maintain its normal schedule of flights and appealed to passengers to continue to book for their travel “as usual”.
The unions are, however, sticking to their agitation plan that began today with employees on duty wearing black badges to protest the decision to delay the payment of this month’s salary by a fortnight. The management has also asked the airline top brass not to take their July salary.
At his meeting with them here yesterday, AI CMD Arvind Jadhav sought the employees’ cooperation in reviving the airline which was reeling under a loss of about Rs5,000 crore.
Assuring their cooperation with the management to cut costs, leaders of Air Corporation Employees’ Union (ACEU), Aviation Industry Employees’ Guild (AIEG) and Indian Aviation Technicians Association (IATA) suggested that many staffers wanted to be transferred to the ow-cost subsidiary, Air India Express, with lower salaries, while others were ready to accept leave without pay for two years.
The national carrier has approached the government for infusion of funds by way of equity, soft loans and a grant. The airline has started making payments on aircraft deliveries which are part of its orders for 111 planes worth about Rs50,000 crore.
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First Published: Mon, Jun 22 2009. 03 30 PM IST