Air India’s operations could be disrupted again from November 1 with a section of employees threatening action over non-payment of productivity-linked incentive (PLI) dues. This could gather momentum with the erstwhile Indian Airlines workforce now contemplating following suit.

Incentive issue

The spokesperson for the Indian Commercial Pilots Association (ICPA), Capt R.S. Otall, said on Wednesday, “If our PLI dues are not paid by November 1, we will take any action from the book.”

He added that these were pending since August this year. The ICPA represents 1,000 former Indian Airlines pilots.

Late last month, executive pilots of Air India went on a five-day strike on the same issue. The airline then had to roll back its decision of 50 per cent cut in PLI. This was to have translated into savings of Rs 20 crore a month had it been enforced on 7,000 of the total 31,500 employees.

Grappling with loss

Air India is still grappling with losses of Rs 7,200 crore accumulated in the last two years. The current fiscal could see it slip deeper into the red with losses of Rs 5,000 crore.

As a result, it is looking at ways and means of cutting costs and reducing wage overheads. The Centre has made it clear that any financial aid would have to be preceded by cost-control.

The Minister of Civil Aviation, Mr Praful Patel, had said this month that Air India was not only looking at reducing costs by Rs 3,000 crore but also increasing revenue by Rs 2,000 crore.

Pre-delivery payments

Sources have said that the airline is expected to get Rs 3,000 crore from the Centre towards pre-delivery payments for a part of the 111 aircraft ordered. In all, it needs Rs 9,000 crore over the next three years.

Last week, the Group of Ministers headed by the Finance Minister, Mr Pranab Mukherjee, said Air India needed to evolve a concrete plan on savings.

Source:
Air India may hit air pocket again from Nov 1
The Hindu Business Line
Date- 29 October 2009
Edition- New Delhi
http://www.thehindubusinessline.com/2009/10/29/stories/2009102951322000.htm