The wage revision, covering officers including the executive cadre, is expected to be with retrospective effect from January 1, 1997. Air India chairman and managing director Vasudevan Thulasidas confirmed that talks are in the final stage and would conclude soon.
"We have already signed the (settlement) agreement with over 8,000 employees. Now, we will sign with the staff at the officer level soon," he said. Thulasidas, however, declined to divulge more details.
According to sources, the wage bill of Air India is between Rs 800 crore (Rs 8 billion) and Rs 1,000 crore (Rs 10 billion).
This constitutes 15 per cent of the airline's operating cost. The total outgo for Air-India on the wage settlement front is estimated at Rs 100 crore (Rs 1 billion) per annum.
"The hikes in wages are expected to be in the range of 25 per cent to 30 per cent," the sources said. Analysts said the outgo following the wage revision and settlement may impact the financials of the company.
The sources pointed out that the airline's outgo post-settlement between the employees' union and the A-I management was Rs 48 crore (Rs 480 million) a year.
The aircraft-employee ratio of A-I, which is set to make its debut in the capital market with its initial public offer this calendar year, declined to 1:375 in 2006 vis-a-vis 1:450 in 2001.
"The number of employees has declined to 15,500 for a fleet strength of 42 aircraft in 2005-06 against 18,500 for 26 aircraft four years ago," they said.
Reasons for this reduction have been: attrition not being duly compensated, voluntary retirement scheme, abolition of posts in the non-operational cadre, redeployment of staff and closure of non-core establishments abroad.
The national flag carrier posted a marginal growth in net profit at Rs 96.39 crore (Rs 963.9 million) for the financial year ended March 31, 2005 against Rs 92.33 crore (Rs 923.3 million) for 2003-04.
While it posted 22.2 per cent increase in revenue to Rs 7,630 crore (Rs 76.30 billion) during the financial year compared with Rs 6,246 crore (Rs 62.46 billion) last year, expenses rose to Rs 7,565 crore (Rs 75.65 billion) from Rs 6,238 crore (Rs 62.38 billion).