Part of new plan to raise Rs 1,870 crore internally.
After stiff resistance from its employees against a steep pay cut, National Aviation Company of India Ltd (Nacil), which runs Air India, has come out with a fresh proposal to impose a 15-17 per cent cut on the total salary package.
The total package includes basic salary, dearness allowance, house rent allowance and payments made under the productivity-linked incentive scheme (PLI) . The cut, however, would not be applicable on employees (about 4,000, according to unions) who have a gross salary of less than Rs 20,000 a month.
The new proposal, which has to be cleared by the Cabinet, comes a few months after the airline had made an attempt, since aborted, to push through a plan for a 50 per cent reduction in PLI across the board for its 32,000 employees. That plan was targeted to save Rs 600 crore. But, it wasn’t pushed through because of stiff opposition from the employees.
PLI constitutes 40 per cent of the company’s total annual wage bill of around Rs 3,000 crore. The cut proposed by the new offer is much lower; the earlier one would have cut the salary package by 20 per cent.
The cut in salary would be the key in ensuring the airline is able to raise Rs 1,870 crore from internal resources, a nine-fold increase of what it has been able to rustle up in 2009-10 (only Rs 202.4 crore). Even in 2008-9, the airline had generated only Rs 429 crore from internal resources.
The blueprint for recovery included introducing advertising through the entertainment system on the aircraft, securitisation of its prime real estate, which includes the iconic Air India Building in Mumbai’s upmarket Nariman Point, to raise loans and further rationalisation of routes.
Confirming the new plan, a senior ministry official said: “We have to raise funds through internal resources. The key to that would be a new plan for cut on the overall pay package of employees by 15-17 per cent, rather than go in for a steep cut in PLI, which has been opposed by employees. Through these measures, we hope to save between Rs 700 crore and Rs 800 crore.”
The airline will get equity infusion of Rs 1,200 crore for 2010-11 as earmarked in the budget, apart from Rs 800 crore received from the government in the financial year 2009-10. The equity infusion of Rs 2,000 crore was part of the government’s decision to bale out the airline from its financial crises and help it reduce its huge losses, as high as Rs 7,000 crore in 2008-09 and expected to increase by another Rs 4,000 crore in 2010-11.
The airline has not been able to meet its targets for 2009-10, when it was expected to save over Rs 2,000 crore from various measures. It has, according to the ministry, being able to save only Rs 800 crore.
A lot of airhostess in Indian are too aged and overweight that even they may not be even considered for ground staff of other private carriers. Flights to neighbouring countries are in pathetic shape ( Seats not reclining, arm rest broken and held with bandage tapes, food tray not getting locked properly). Who will like to sit in these planes!!! Attitude of staff is really horrible.. Before implementing fiscal measures for revamp, India airlines should improve service standards. Despite having the huge staff, service is most poor in airline industry...
indian airlines can earn a lot of revenue from non-flying areas. for example the city office in calcutta is a 7 storey building---if this is rented out a few crores can be earned annually.---the departments which are located in city office building can be shifted to airport area where indian airlines have many rooms and areas which are vacant for a long time------this huge wastage of costly space is meaningless----moreover all offices in southern region and western region are located near the airport--this makes easier for administration and aviods unnecessary travel between city and airport resulting in huge savings BESIDES ANNUAL RENTAL REVENUE FROM RENTING OUT 7 STOREY BUILDING IN PRIME LOCATION--huge telephone expense and communication expense can also be reduced if all offices are located in one place
AIR INDIA HAS A HUGE 7 STOREY BUILDING IN KOLKATA CITY-----THIS CAN BE RENTED AND FEW CRORES CAN BE EARNED AS RENT EVERY YEAR-----THE AIRLINES OFFICES SITUATED IN THIS BUILDING CAN BE EASILY SHIFTED TO AIRPORT AREA JUST LIKE SOUTHERNB REGION AND WESTERN REGION
AIR INDIA IS RECRUITING ENGINEERS FROM IIT BUT POSTING THEM IN PERSONNEL DEPARTMENT FOR NON ENGINEERING WORK---[for example chief personnel manager, ko0lkata]--HOW LONG WILL SUCH TAMASHA CONTINUE?--IIT ENGINEERS POSTED IN OTHER DEPARTMENTS MUST BE IMMEDIATELY TRANSFERRED TO ENGINEERING DEPARTMENT------MR ARVIND JADHAV ARE YOU LISTENING SIR? if this trend continues then pilots may be posted in finance department and air hostess in engineering depat---TAMASH BAHUT HO GIYA
Content Guide
After stiff resistance from its employees against a steep pay cut, National Aviation Company of India Ltd (Nacil), which runs Air India, has come out with a fresh proposal to impose a 15-17 per cent cut on the total salary package.
