Air India’s staff unions, faced with strong management pressure for pay cuts, retort that 80 per cent of employees take less than a third of the yearly Rs 3,500 crore wage bill.
Put another way, when National Aviation Company of India’s (Nacil’s) wage bill is described as impossible to sustain, the unions say it is due in large part to the salaries paid to the same brass which is wanting pay cuts, apart from other creamy layers such as pilots and engineers, who get quite a bit through productivity-linked incentives.
Hence, say the unions, it is these sections which need to take the hit in salaries, not their members. “We represent 80 per cent of the total employees which belong to the low pay category, with average salaries of Rs 15,000 a month. This 80 per cent takes away only 30 per cent of the wage bill. Licenced enginners get productivity incentives which are three times their salary, even though they are not in short supply. The pilots also get huge variable emoluments. The company should look at them, as there is hardly any scope of (pay) reduction from our members,” says Dinkar Shetty, president of the Air Corporation Employees Union (ACEU), the largest union. Other unions representing non-managerial staff spoke likewise.
Meanwhile, cash-strapped Air India today made a presentation before Civil Aviation Minister Praful Patel as part of its efforts to seek a financial package from the government to bail it out of a major resource crunch. The national carrier, which is working on plans to cut cost on employees by at least Rs 500 crore, came out with several proposals to enhance savings over the next few years. The airline’s cost on its 31,000 employees currently stands at around Rs 3,000 crore per annum.
The presentation, made by Air India CMD Arvind Jadhav, which lasted almost three hours, was attended by Patel and Civil Aviation Secretary M Madhavan Nambiar, among others. Jadhav is understood to have briefed Principal Secretary to the Prime Minister T K A Nair yesterday on the airline’s financial position, apart from its growth plans for the next few years. Unions are however willing to cooperate on reduction in productivity-linked incentive schemes. “We understand the tough financial situation of the airline. We are not rigid and ready to cooperate with the management. But we will not accept any salary cuts. We may compromise on the productivity-linked incentives, which includes various allowances and overtime payments. We are ready for a fresh review of our service agreements. It’s time for the civil aviation minister to take a stand,” said Aviation Industry Employees’ Guild (AIEG) president Y I Reddy.
Insiders say the unions have very limited scope to go on a strike, considering AI’s declining market share, both in the domestic and international skies. The company has a domestic market share of only 17.1 per cent (in March) and only a 23.5 per cent share of total capacity of airlines which fly to international destinations. With the airline industry facing passenger load factors of around 65 per cent, there is enough surplus capacity available to absorb passengers in case of a strike in Air India. “
All officials were tight-lipped about today’s meeting, which came less than a fortnight before the presentation of the general Budget amid expectations that the government may take some steps to ease the national carrier’s financial problems. Air India has already approached the government for urgent infusion of funds by way of equity, soft loans and grant.