AI may freeze salary hikes of employees

AI may freeze salary hikes of employees

Mumbai: Cash-strapped Air India Ltd is considering a freeze on salary hikes and additional allowances to employees until the process of its merger with Indian Airlines is completed.

Arvind Jadhav, chairman and managing director of Air India, the company formed by the merger of the two state-owned carriers, asked workers in a letter to cooperate in the “gigantic task of turning around Air India".

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The national flag carrier has accumulated a loss of at least 13,300 crore since the merger began in 2007. It is implementing a financial turnaround plan prepared by Deloitte Consulting India Pvt. Ltd.

“I wonder whether we can begin by putting a cap on our (employees) cost. Can we say freeze our compensation—at least till the process of integration and merger get completed/implemented?" Jadhav wrote in a letter dated 25 March. Jadhav pointed out the airline is handling 320 flights, carrying 72,500 passengers and generating 36 crore a day. Mint has reviewed a copy of the letter.

On Tuesday, Jadhav said a new passenger service system, implemented by the aviation information technology (IT) specialist SITA, will help increase the carrier’s revenue by 15% in the next 18 months, getting 30% of customers to book tickets directly on the airline’s website in next 24 months, up from the current 12%.

SITA’s chief executive Francesco Violante said his firm did a similar job for Malaysia Airlines in 2007, helping it reduce costs by over $270 million (Rs 1,206.9 crore) during a turnaround programme.

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