New Delhi: Having gone without the bulk of their salaries for nearly four months, Air India Ltd employees have asked Prime Minister Manmohan Singh to intervene ahead of the meeting of a ministerial panel to discuss the state-owned carrier’s financial affairs.

Turbulent period: A file photo of Air India aircraft at the Mumbai international airport. Photo: Abhijit Bhatlekar/Mint.

A copy of the letter has been reviewed by Mint. Icpa is Air India’s largest pilot union, with more than 600 members.

A group of ministers led by finance minister Pranab Mukherjee will meet on Thursday, a day after Diwali, to decide on a final bailout package for Air India, which has accumulated 40,000 crore in debt and incurred a loss of 7,000 crore in fiscal 2010-11 alone.

The meeting is also expected to decide on a plan to revamp operations of the carrier and whether it should go ahead with the purchase of Boeing 787 Dreamliner aircraft worth $4 billion (nearly 20,000 crore), ordered in 2006.

Air India has 40,000 employees and an annual wage bill of 3,000 crore, roughly the size of low-cost airline SpiceJet Ltd’s annual revenue. The carrier hasn’t paid PLI to employees since July. It has also defaulted on payments to airport operators and oil companies.

Kingfisher Airlines Ltd has also delayed salaries to employees for the past two months.

Air India seems to be improving under the new chairman and managing director, Icpa said in the letter.

Rohit Nandan took over as Air India’s chairman and managing director in August, replacing Arvind Jadhav.

Civil aviation minister Vayalar Ravi on Monday held a three-hour review meeting of Air India ahead of the group of ministers (GoM) meeting, which is expected to decide on the turnaround plan submitted by a group of finance ministry officials.

“Air India will make a presentation of the performance of the last three-four months and the group of officers will make their own presentation on TAP (turnaround plan). Besides, other actions taken by the airline will be reviewed," said a government official, asking not to be identified.

A retired Air India official said the airline should introduce a compulsory retirement scheme to cut down staff before it begins implementing the turnaround plan.

“What AI needs is not VRS (voluntary retirement scheme) but CRS—compulsory retirement scheme—so that services of employees who are a liability on the company can be dispensed with. VRS will only allow the competent to leave, thus creating loss of managerial talent, which is already scarce," said the official, requesting anonymity.

The official said both Air India and the erstwhile Indian Airlines, which were merged under the Air India brand in 2007, have a rule that allows them to retire an employee at 55 without paying compensation. “This is what should be resorted to for salvaging AI as it does not involve any payment," he said.

“The other step vitally needed," the official said, “is to place a moratorium on implementation of union agreements so that all wasteful practices, unproductive payments are done away with. This includes paying pilots of the pre-merger AI compensation for 80 hours whether they have flown or not."