Air India slashes employee allowances by 20-50%

Reeling under the covid-19 pandemic, national carrier Air India Ltd has initiated a pay cut for its employees, which involves trimming down allowances by 20-50%, according to a circular issued by the airline on Wednesday.

The decision comes a day after the country's largest domestic airline, IndiGo said it will lay off 10% of its workforce to pull through the disruptions caused by covid-19 pandemic.

According to the circular, while various allowances for pilots will be reduced by 40% percent, other allowances for others like general category officers and staff will be reduced by 30-50%. Cabin crew will have several allowances cut by 20%.

Such allowances for pilots that are subjected to cuts include flying allowance, special pay, widebody allowance (for pilots that fly widebody planes), domestic layover allowance, quick return allowance, high altitude allowance, check allowance, instructor allowance, examiner allowance, additional landing allowance, and executive flying allowance.

Furthermore, flying allowance will now be paid on the actual hours flown by individual pilots on a monthly basis, the airline said.

A copy of the circular has been seen by Mint.

Pilots, whose allowance component in their salaries exceeds basic pay, are the worst affected by the decision of the airline that is to come into effect from 1 April 2020, two Air India pilots said.

"We are not opposing the pay cut but the 'discriminatory' nature of the pay cuts, which involve pilots to forgo a large part of their salaries while others take a smaller pay cut," said the first pilot, requesting anonymity.

"We shouldn't be taking a 60% pay cut while the others are taking a 10% pay cut. Especially, since it was us pilots who flew to regions like Wuhan and others during the pandemic, risking exposure to the virus," said the second pilot, who's a member of Indian Pilots' Guild (IPG), a pilots union at the airline comprising about 450 pilots flying wide body planes like Boeing 787, Boeing 777 and Boeing 747 planes at the airline.

When contacted, an Air India spokesperson said that the airline will not comment on its internal affairs.

Air India is in the process of implementing cost-cutting plans, which include salary cuts and leave without pay (LWP) for a section of the workforce that have been implemented by the airline's board.

Earlier in July, the airline's board of directors approved a leave without pay scheme for its permanent employees for a period of six months to two years, which is extendable to upto five years, in a bid to cut costs during the current pandemic.

The national carrier has about 1700 pilots in its ranks and several unions representing pilots. Last week, several unions of the airline, in separate letters to Air India chairman and managing Rajiv Bansal, said the decisions were taken unilaterally without consulting them.