Mumbai: Cash-strapped Air India has deferred productivity-linked incentives, or PLIs, to all its employees until 20 August. In a circular dated 22 July, the national carrier, however, said it will pay salaries for July at the end of the month.
Arvind Jadhav, chairman and managing director of National Aviation Co. of India Ltd, or Nacil, which runs Air India, has directed that PLI norms for the company as a whole be reviewed and PLI parameters be revised, people familiar with the matter said.
Cash crunch: The Air India building in Mumbai. A four-member panel is reviewing salary arrangements and productivity-linked incentives. Abhijit Bhatlekar / Mint
The circular said PLI payments would hence be postponed. It also said the payment of the corresponding element of PLI in the flying allowance needs to be postponed.
An Air India spokesperson confirmed the management’s decision to pay the July salary on time. But on PLI payments, the spokesperson said a four-member committee is currently reviewing salary arrangements and PLI.
Nacil’s wage bill stands at about Rs3,000 crore per annum and PLI accounts for almost half of this amount.
PLI for ground handling staff stands at about Rs600 crore per annum, while PLI for pilots, engineers and cabin crew stands at about Rs800 crore per annum.
People familiar with the matter said the PLI norm is being reviewed to lessen the huge disparity in the scheme for Air India and Indian Airlines staff. Air India and Indian Airlines were merged into one company, Nacil, which uses the Air India brand.
In the case of pilots, cabin crew and aircraft engineers, PLI is almost two-three times their basic salary, while for others it is much less. The idea is to bring PLI at par across the company, people familiar with the matter said.