Special Correspondent

Applicable to all officers, including top management personnel

25 per cent cut for PLI of Rs.10,000 or less monthly; 50 per cent for Rs. 2 lakh or more

AI already announced its intention after running Rs. 5,000-crore loss in 2008-09

MUMBAI: The Board of Directors of national carrier Air India (AI), at its meeting has , announced a cut in the Productivity Linked Scheme (PLI) paid to its officers and senior management.

The Board accepted the recommendation of the Committee headed by Anup Srivastava, Director-Personnel, AI, constituted to review the PLI paid to employees.

The cut, applicable to all officers including top management personnel, will range from 25 per cent for those getting PLI of Rs.10,000 or less a month and 50 per cent for those receiving PLI or flying-related allowances of Rs.2 lakh or more a month. The cut for those receiving PLI of Rs.10,001-Rs.25,000, Rs.25,001-Rs.50,000 and Rs.50,001-Rs.2 lakh will be 35 per cent, 40 per cent and 45 per cent respectively.

This cut will be effective from PLI payable in August 2009 and the number of employees covered by the decision will be over 7,000.

This measure does not cover any of the unionised staff of the airline who form over 70 per cent of its 31,000 workforce.

The PLI is a key constituent of the airline’s annual wage bill, which is around Rs.3,000 crore with the PLI amounting to around Rs.1,400 crore.

The PLI accounts for a large proportion of the overall salary of the AI employees varying from 35-40 per cent at the senior level to 20-25 per cent at the lower levels.

Air India, which had reported a loss of around Rs.5,000 crore in 2008-09, has already indicated its intention to cut wage costs by up to Rs.500 crore per annum. Speaking to The Hindu, George Abraham, Chairman, Aviation Industry Employees’ Guild (AIEG) said: “Today’s announcement does not apply to our union members. We will in all likelihood have a discussion with the management at a later stage.”

The AIEG along with Air Corporation Employees’ Union (ACEU) claims to represent more than 70 per cent of the unionised staff of AI and almost exactly a month ago the two unions had objected to AI’s proposal to halve PLI across the board.

Dinkar Shetty, all-India president of the ACEU, said, “We represent even the lowest grade workers of Air India. Out of the more than 20,000 members of the AIEG and ACEU, less than 5 per cent get PLI above Rs.10,000.”

The airline has drawn up a three-year turnaround plan that includes measures to reduce costs and increase revenues.