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Air India looking at pruning incentives to overcome losses
Monday, 20 July 2009, 14:20 IST
New Delhi: Cash-strapped state-run carrier Air India is reworking the employees' productivity-linked incentive (PLI) scheme as part of its restructuring plan.
PLI accounts for almost half of the company's 
3,000 crore wage bill. In the first instance, the airline is looking at reducing the wage bill by 500 crore. Currently, the PLI for some employees is more than their salary.
Air India officials said restructuring PLI for the 31,000 employees would be a tough task. "But we need to restructure such expenses and the PLI would be directly related to performance," said a senior airline official.
Prime Minister Manmohan Singh had asked Civil Aviation Minister Praful Patel last month to prepare a restructuring plan by the month-end. Patel has asked the prime minister for a bailout of 10,000-15,000 crore.
Middle-senior rung engineers besides top management officials get over 100 percent of their salaries as PLI apart from salaries.
Due to the financial crunch, salaries have been delayed but PLI payouts have remained nearly the same amid losses incurred by the airline and its deteriorating share in India's aviation sector.
The PLI restructuring is yet to be discussed with various employee unions, which are opposed to the proposal.
"The PLI is part of our salary. It is not an incentive. It is also linked to productivity and not profits," Anand Prakash, the joint secretary of the Air Corporation Employees Union, said.
But ministry officials countered this and pointed out that the number of employees per aircraft in Air India was more than double compared to the private airlines.
Source: IANS
3,000 crore wage bill. In the first instance, the airline is looking at reducing the wage bill by 500 crore. Currently, the PLI for some employees is more than their salary.
Air India officials said restructuring PLI for the 31,000 employees would be a tough task. "But we need to restructure such expenses and the PLI would be directly related to performance," said a senior airline official.
Prime Minister Manmohan Singh had asked Civil Aviation Minister Praful Patel last month to prepare a restructuring plan by the month-end. Patel has asked the prime minister for a bailout of 10,000-15,000 crore.
Middle-senior rung engineers besides top management officials get over 100 percent of their salaries as PLI apart from salaries.
Due to the financial crunch, salaries have been delayed but PLI payouts have remained nearly the same amid losses incurred by the airline and its deteriorating share in India's aviation sector.
The PLI restructuring is yet to be discussed with various employee unions, which are opposed to the proposal.
"The PLI is part of our salary. It is not an incentive. It is also linked to productivity and not profits," Anand Prakash, the joint secretary of the Air Corporation Employees Union, said.
But ministry officials countered this and pointed out that the number of employees per aircraft in Air India was more than double compared to the private airlines.
Source: IANS