There may be even more turbulence ahead for troubled national carrier Air India, as the civil aviation ministry has reportedly begun work towards implementing the Dharmadhikari Committee report, which suggests bringing about pay parity between employees of Air India and those of the erstwhile Indian Airlines, which was merged into AI in 2007.
The ministry has also decided to implement the panel's suggestions for scrapping of performance-linked incentive to employees to bring the AI pay structure in line with the Public Enterprise Selection Board, according to a Times of India report citing unnamed sources.
The ministry is yet to decide on other suggestions like allowing pilots of AI and IA to be cross-utilised for all aircraft in the merged airline's fleet, while having different seniority criteria for them. A ministerial panel is studying the report to decide what would finally be done so that implementation can begin in two months.
"Air India pilots are the highest paid pilots in the world. In the first year of implementing the report, we are targeting a saving of Rs250 crore. This will mean some people take some pain, but the cuts for people who are getting way more than the industry average will not be more than 10-15 per cent," the paper cited a source as saying.
AI's annual wage bill for its 28,500 staff is about Rs3,000 crore; and performance linked incentives (PLIs) account for 60 per cent of this. Its 1,600 pilots get about Rs800 crore annually between them; and PLIs account for anywhere between 70 and 200 per cent of their total pay.
The problem stems from the fact that historically both AI and IA pilots and some other crucial sections of employees managed to 'buy' peace with their respective managements by entering into agreements that meant fatter pay cheques. In fact, a Comptroller & Auditor General report on AI clearly said both AI and IA saw their employee cost rise despite a substantial reduction in number of staff from 2005 to 2010.