In 1998-99, Air-India reported a Rs 140 crore operating loss -- more or less equal to the Rs 139 crore it paid its employees as PLI. The critics of the scheme can thus say that but for these incentives, the airline would have been in the black. But the scheme's proponents, including at least two of the unions, say that but for the scheme the balance-sheet would have looked worse.

"The scheme was launched through an agreement with the management. How can it now be withdrawn?" asked a senior official, who is also a beneficiary. "You may call it PLI, but I consider it a part of my salary," said another staffer who maintained that his cadre was still underpaid vis-a-vis other organisations. "The airline willhave to pay more if it has to source the work we do from outside," he added.

"We are highly skilled personnel and have paid a lot of money to acquire these skills whereas other labour can be called at the call of a whistle," a senior official said.

The PLI scheme was launched when the airline's fortunes began dipping. After seven consecutive years of profits, the airline reported an operating loss of Rs 413 crore in 1996-97. In that year, Rs 74 crore was paid for better productivity! The losses started declining after that, but the PLI payments started soaring. The outgo on PLI increased to Rs 134 crore for 1997-98 when the operating loss was Rs 193 crore.

The impact of the PLI on the airline's bottomline has been acknowledged by a handful of its employees, including the managing director, who have voluntarily surrendered all or a part of their incentives. Some categories of the airline's employees are said to be willing to follow suit provided all others do so. "Only if everybody gives up theincentives will others fall in line. Incentives should be removed across the board. It has to be all or none," said a member of the Air-India Employees' Guild. However, a section of the employees who get the lion's share of PLI are not willing to accept this.

Among them are the aircraft maintenance engineers, who get a minimum of Rs 14,000 and a maximum of Rs 1.09 lakh a month over and above their salaries for better performance.

On an average, these 631 employees get Rs 62,070 per month as PLI. The management, which had had a series of meetings with employees, is now in a fix because at least two unions have refused to change their stands. These two are the Air-India Aircraft Engineering Association and the Indian Pilots' Guild. The other five could still be persuaded to yield to the request, sources said.

The very method of computing these incentives has become an issue of debate. "We did not realise the implications of the criteria which allowed only a small section of employees to get a lion'sshare of the incentives," said a guild member. Officers and staff of the engineering and engine overhaul departments get substantially higher PLIs than employees in other departments. Pilots do not get PLI but are paid "shortfall" or "bypass" allowances which are substantial.

The scheme was introduced in May 1996 to retain a section of the skilled category employees who were threatening to leave for better pastures. Experts say that while there is no dispute on rewarding staffers for extra efforts, the criteria for the PLI scheme need a relook. It was, in fact, opposed by some senior officials even when before it was launched. The scheme is a fallout of the demand for higher wages made by Air-India pilots.

They were insistent that they should be paid remuneration at par with their counterparts in private international carriers or threatened to resign. The company then introduced the "shortfall allowances" to pay additional money to pilots.

Under this scheme, senior pilots were guaranteed higherpayments than their juniors even if they did not fly the same number of hours. This was calculated on a monthly basis. However, the management finally settled for a half-yearly calculation to give more leverage for equal flying hours to pilots. The PLI parameters, which are different for various catagories, are basically linked with aircraft availability, dispatch reliability and on-time performance. There is a school of thought which maintains that these incentives should be linked with profitability. "If the company does not make profits, how can it afford to give rewards above salary levels?" experts ask.