Air India staff salaries will be restored when situation improves: Govt

Pilots say five-year leave without pay as good as layoff, threaten litigation which may hurt airline's privatisation process

Facing heavy protests from employees, the government on Thursday said that no staffer of the state-owned Air India will be laid off. However, the union of pilots said that five-year leave without pay was as good as retrenchment.

Air India has begun a cost-cutting drive which includes a reduction in salary for pilots and sending around 600 employees on furlough.

on July 7, the airline's board approved the scheme of 'Leave Without Pay' ranging from six months to five years. While the scheme is voluntary, if it doesn’t get a good response from employees, the board has authorised Chairman and Managing Director Rajiv Bansal to forcibly send employees on leave.

"Recent decisions of the Air India board regarding rationalisation of staff cost were reviewed in a meeting at the Ministry of Civil Aviation this evening. The meeting reiterated that unlike other carriers which have laid off a large number of their employees, no employee of Air India will be laid off," the airline, on behalf of the government, said in a statement.

The airline compared the action with private airlines which have announced job cuts. On Monday, largest airline IndiGo said 10 per cent of workforce will be laid to control the impact of the pandemic.

Besides the leave without pay, the airline has announced reduction in monthly allowances of its employees who have a monthly gross salary of more than Rs 25,000 by up to 50 per cent.

The airline explained that rationalization of allowances had to be implemented on account of the difficult financial condition of the airline that was exacerbated by COVID-19, adding that once situation improves, original salary will be restored.

There has been no reduction in the basic pay, DA (dearness allowance) and HRA (house rent allowance) of any category of employees. Flying crew will be paid according to actual hours flown against the current norm of fixed pay for 70 hours.

However, Air India’s senior most pilots on Thursday in a letter to civil aviation minister Hardeep Singh Puri warned that the airline’s “massive forced pay cuts” and compulsory leave without pay (LWP) schemes could have a “potentially disastrous psychological impact” on some employees.

Saying that 60 Air India pilots who operated repatriation flights under government’s Vande Bharat Mission have been infected by the virus, the pilots said that employees may be forced to challenge the decision in court which may be a hurdle for the privatization process of the airline. “ A rising stack of litigations and financial liabilities arising out of pending financial dues owed to employees could potentially destroy our organization‟s future health, and more so, would be unfairly transferred to any prospective buyer of Air India,” the Executive Pilots Association wrote.

The airline, which has been identified by the Centre for privatisation, has accumulated a debt of ~69,576 crore. It posted a loss of ~8,556 crore in FY19, as against a net loss of ~5,348 crore in the previous financial year.

The government, facing pressure on its revenues, has refused to further infuse any equity into the company. It has also hived off almost 60 percent of the airline’s debt into a subsidiary to clean the balance sheet as part of the sale process.