Decision on AI employees' incentives likely today

The Air India Board is likely to take a final call on employees' Productivity-Linked Incentives (PLI) or flying allowance issue in its crucial meeting today.     

Air India sources said the panel, which was set up by the management to review PLI norms for the company and revise its parameter last month, is expected to submit its report.

Besides, the management would also seek the board's nod for borrowing from banks, they added.     

"The panel has finalised its report. It is likely to recommend a 30-50 per cent reduction in employees PLI, based on slab system. Pilots, engineers and executive cabin crew may be given 50 per cent cut in PLI," the sources said.

"Air India has to save Rs 800 crore in a year to get the financial package. Since PLI itself amounts to around Rs 1,500 crore per year, by way of reducing it by up to 50 per cent the company will save around Rs 750 crore a year," they explained.     

Air India is seeking a bailout package in the form of equity infusion and soft loan from the government. The airline had proposed a 50 per cent cut in PLIs/flying allowance of its employees last month.     

However, due to opposition from the majority of the employee unions, the management deferred the proposal and set up a panel to look into the whole issue.     

The panel was told to submit its report by September 30.     

The unions reasoned that the management should take other routes to turn around the company and not simply by reducing employees' wages.     

Air India management will also seek the board's approval for borrowing from banks to carry out its day-to-day workings, sources added.