Mumbai/New Delhi: Employees of National Aviation Co. of India Ltd (Nacil) ended their hunger strike on Thursday evening, but announced that they will continue to protest by not working extra hours between Friday and Sunday, and then forming human chains and holding luncheon protests.
Nacil operates the national carrier Air India.
“The next course of action is ‘zerotime overtime’,” said J.B. Kadiyan, general secretary of the Air Corporation Employees’ Union (ACEU) adding that members of another major union, Aviation Industry Employees’ Guild (AIEG), would join ACEU in the protest.
Tight spot: Arvind Jadhav, chairman and managing director, Air India. Harikrishna Katragadda / Mint
Both unions together count at least 20,000 workers as members. “There will be no flight disruption or inconvenience to the passengers,” Kadiyan said.
A senior Air India official who did not want to be identified said the airline had already issued orders that “overtime expense has to be controlled and accounted for”, implying that the protest was irrelevant because the airline was anyway not keen on having employees work extra hours.
On Wednesday, a majority of Nacil employees rejected a proposal to cut 50% of their productivity-linked incentives (PLI), making it harder for the embattled carrier to argue its case for an equity infusion and soft loans from the government. “Now Air India is left with no option (but) to act tough. We cannot go ahead with this unsustainable PLIs,” said a senior official with the civil aviation ministry, who spoke on condition of anonymity.
Last Friday, the debt-ridden, state-owned carrier announced a 50% cut in PLIs, that accounts for 30-50% of the salary of Air India employees, hoping to save around Rs700 crore. These incentives cost Air India Rs1,400 crore in 2008-09, a year in which the airline suffered losses of at least Rs5,000 crore.
Following a request from Prime Minister Manmohan Singh, a committee of secretaries (CoS) had suggested that Air India prepare a cost-reduction proposal, including an alternative to its current incentive scheme, before the government could offer any help.
With accumulated losses of Rs7,200 crore and debt of Rs15,241 crore as of June, cash-strapped Nacil had asked for a loan and equity infusion of around Rs15,000 crore from the government. Its current equity capital is a mere Rs145 crore.
Jitender Bhargava, Nacil’s executive director of corporate communications, declined details on other cost-cutting proposals that will be made to the CoS.
“It appears they still do not understand the gravity of the situation,” the Air India official said of the unions’ moves, but denied that the airline had threatened them that it would hand over the company to the Board for Industrial and Financial Reconstruction (BIFR).
However, he did not rule that out as an option.