Air India names committees to cut costs

National Aviation Company Ltd, which runs Air India, has constituted committees to review productivity-linked incentives and cost cutting measures. These will talk with the labour unions and report on Monday.

The four committees will deal with technical issues, non-technical, operations and inflight/general unions. The committees, constituted last week, are headed by Amod Sharma, Anup K Srivastava, Vipin K Sharma and K M Unni. A senior-level committee above these four committees has also been constituted and is headed by Anita Khurana.

These committees will recommend where to cut costs. The government's Committee of Secretaries headed by Cabinet Secretary K M Chandrasekhar had, in their last meeting, asked the airline to take aggressive cost-cutting measures.

The Air India board had proposed a 50 per cent cut in PLI of all the employees, which the unions have not agreed to and two of the unions also went on a relay hunger strike for three days.

The airline has over 31,000 employees and a wage bill of over Rs 3,100 crore. Of this, 40 per cent is the PLI component and a 50 per cent PLI cut would save the airline over Rs 600 crore.

Various combinations are being worked out, but sources in the union say the PLI of engineers may be cut by 40 per cent and the rest of them might see a cut of 20 per cent. Also, pilots may lose their guaranteed flying allowance.

Air India had losses of Rs 5,000 crore on its books in 2008-09 and debt of Rs 16,000 crore, the bulk of it being high-cost loans.