Mumbai: State-owned airline Air India that is seeking a bailout package of up to Rs15,000 crore from the government has, for several years now, been paying employees allowances to which they weren’t entitled.
The so-called productivity-linked incentive (PLI) scheme of the airline hasn’t been approved either by Air India’s board or the government, S.K. Chhikara, undersecretary in the ministry of civil aviation wrote in a letter to the airline in late 2008.
Hindustan Times couldn’t immediately ascertain the share of such payments in the airline’s Rs3,000 crore annual wage bill. The PLI scheme was launched in 1996 to prevent the exodus of employees to other airlines. It is applicable to all employees except pilots and cabin crew who earn a flying allowance.
Violation of rules: Air India introduced the scheme in 1996 to prevent the exodus of employees to other airlines. Indranil Mukherjee / AFP
Hindustan Times has reviewed documents that show that the airline ignored the government’s warnings to discontinue the scheme.
The implementation of the PLI scheme also shows several lapses.
For instance, according to the leader of one of the airline’s largest unions, maintenance engineers are entitled to a Rs9,000-a-month incentive for each type of aircraft they maintain.
Some engineers are being paid Rs54,000 for overseeing the maintenance of six types of aircraft, while Air India flies only four types of aircraft. The payments should be recovered from these engineers, added this union leader, who did not wish to be identified for fear of retribution.
A spokesperson for the airline declined details on salaries and suggested Hindustan Times wait for the findings of a committee that is examining wage agreements at Air India.
A rationalization of the scheme which has previously attracted the ire of the Comptroller and Auditor General, the accounting watchdog that audits the government’s finances, could bring down the airline’s wage bill, added the union leader.
The scheme is also in violation of rules governing salaries at state-owned firms.
According to the Department of Public Enterprises, which oversees the functioning of state-owned firms across the country and fixes the remuneration of their employees, allowances should not exceed 50% of the basic pay of any employee.
However, for some employees, the incentive ends up being several times the basic salary, said a senior executive at Air India who did not wish to be identified.
Air India’s 31,000 workers are represented by 14 recognized trade unions and several unrecognized ones. The airline has 210 employees for each of its 147 aircraft and employees one out of every three people working in India’s aviation sector.