Air India targets Rs500-crore reduction in salary bills

Air India, which has not resorted to retrenchment or layoff till date to tide over the financial crisis arising out of difficult market conditions affecting airlines world over, has constituted a four-member committee, comprising officials from HR and finance, to examine the wage agreements, including flying allowances and productivity-linked incentives, entered into between the management and unions, associations and the guild.

Air India is targeting a reduction in employee cost to the tune of Rs.500 crore per annum. Air India's employee cost is currently Rs.3000 crore plus annually. Besides reduction in wage cost, Air India is also looking at improving productivity of employees, elimination of restrictive work practices and reducing wasteful expenditure.

The committee, which has been directed to discuss cost rationalization and reduction of wasteful expenditure with the Unions, Association and Guild, has been asked to submit its report latest by July 15, 2009.

Meanwhile, Air India has reiterated its resolve to maintain its flights as per normal schedule and urged passengers to book for their travel on its flights as usual.