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Friday, January 8, 1999

Air-India's bid to cut cost yields rich dividends 

Vandana Saxena  
Mumbai, Jan 7: Over 500 employees of Air-India have availed themselves of the "leave without pay" and "shorter working week" schemes launched last year to cut costs.

Around 150 staff are being relieved from duty for long leave without pay. Of the staff who subscribed to the scheme, around 340 have opted for long term leave. This leave period varies from two years and more as offered by the scheme.

The rest have preferred to go for the shorter working week. According to the scheme, the employees were offered a choice to work any three days in a week from Monday to Friday.

Those who have subscribed to a shorter working week will have to forgo part of their basic pay and other benefits such as dearness allowance and performance-linked incentives for the non-working hours. There are also conditions relating to privilege and sick leave. The employees were asked to take the benefits for at least a year.

Launched last September, the scheme were part of the company's drive to reduce expenses. It had earlierlaunched a programme for the same objective which included curtailing expenditure on travel, seminars, conferences and sponsorships.

Under the long term leave, the employees were also allowed to take up any other job either here or abroad during their absence. However, they had to take prior permission from the company.

During the leave period, the staff also have to give up several monetary and other benefits. This included loss of seniority in the higher grades. The response could have been much higher if the company had not announced the possibility of a voluntary retirement scheme (VRS), according to some staff. AI has yet to decide on implementing the VRS.

Meanwhile, the civil-aviation ministry has been examining various options to improve the company's health. This also includes the disinvestment of the government's stake in the company.

There are also talks of merging AI and Indian Airlines though a final decision is still to be taken. The proposed VRS may also depend on the issue ofprivatisation and merger, employees say.

The ministry has recently made changes in the boards of the two companies though no strategy has been spelt out. While AI is still reporting losses, IA posted a profit last year. However, it remains to be seen if this can be repeated for the current fiscal also.

Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.


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