Inter-ministerial consultations are on over a draft note on restructuring the pay structure of Air India’s pilots and cabin crew which is to be tabled before the Union Cabinet, official sources said on Friday.
On completion of these consultations, the Cabinet Committee on Economic Affairs (CCEA) would take up for consideration the proposal which is likely to save over Rs 320 crore annually for the ailing national carrier, they said.
The draft was based on the recommendations of Justice D.M. Dharmadhikari Committee, which had gone into issues relating to pay-scales and career progression to bring about integration and parity among the employees of the two erstwhile state-run airlines — Air India and Indian Airlines.
While the pay scales and allowances of the employees have been fixed in accordance with the Department of Public Enterprises (DPE) guidelines, those for pilots, engineers, cabin crew and technicians would be determined on the basis of the industry norms.
Since these issues fall beyond DPE guidelines, the approval of the Union Cabinet is required, the sources said.
Air India’s annual wage bill stands at about Rs 3,200 crore, of which Rs 1,750 crore is spent on wage and allowances for licensed category employees such as pilots, cabin crew and engineers.
Restructuring of allowances for the licensed staffers is estimated to save Rs 200 crore, while those for the non-licensed ones could save another Rs 120 crore, they said.
While Productivity-linked Incentive (PLI) for all staffers has been abolished from July last year, an important issue is to end the difference in the flying allowances for all categories of pilots (Commander, Captain and First Officer) between Air India and erstwhile Indian Airlines.
This issue was a major reason for the 58-day long strike by the pilots last year. The Dharmadhikari Committee had recommended that PLI should be replaced by Profit/Productivity Related Pay (PRP) to encourage efficient working of employees.
While PRP would be given only after Air India starts making profit, the sources said it would be determined on the basis of achievement of some key performance indicators like yield, aircraft utilisation, passenger load factor, on-time performance and revenue achievement.
There are indications that the flying allowances would be uniformly fixed for all pilots for a guaranteed 70 hours a month, in line with the pattern followed by domestic and international airlines.
Another proposal relates to the layover allowance for pilots, which is paid to pilots for stay at a foreign destination between two flights.
For cabin crew, the proposal is to give flying allowance at the rate of Rs 250-Rs 1,000 for a minimum 70 hours, while the engineers are proposed to be given emoluments comparable to industry standards, besides an additional component of up to Rs 1.5 lakh.