Unprincipled for senior officials to exclude their perks from cost-cutting measures: Air India pilot unions

By: |
July 24, 2020 6:16 PM

In another step to rationalise staff costs, the airline issued an internal order on July 14 asking its departmental heads and regional directors to identify employees, based on various factors like efficiency, health and redundancy, who will be sent on compulsory leave without pay (LWP) for up to five years. Moreover, the carrier said employees can voluntarily opt for the LWP scheme too.

The national carrier has a debt of around Rs 70,000 crore and the government started the process to sell it to a private entity in January.

It is unprincipled for the senior officials of Air India to exclude their perks and entitlements from the cost-cutting measures that the airline has implemented during the last few days, said the two leading pilot unions of the carrier on Friday.  Air India had on Wednesday announced upto 50 per cent reduction in monthly allowances of its employees, who have a gross monthly salary of more than Rs 25,000.

The 50 per cent cut for senior Air India officials is only on “other allowances” and this equates to an approximate 10 per cent pay cut on the gross salary for the Director-Personnel who is also a “functional director”, said the Indian Commercial Pilots’ Association (ICPA) and Indian Pilots’ Guild (IPG) to Air India Chairman and Managing Director Rajiv Bansal on Friday through a letter.

This is a deliberate whitewash to shield top management from any significant pay reduction, the letter added.
“Around 63 cars are provided on lease for functional directors, executive directors, regional directors and general managers. Average lease rent per car per month as per market rates would be around Rs 24,000. This estimates close to Rs 2 crore per annum. Conveniently, this too is not re-examined in any austerity measures,” the letter said.
The letter mentioned that while functional directors are eligible for 270 litres of fuel per month, executive directors are eligible for 140 litres of fuel per month.

“The fuel expense for these two categories runs into approximately Rs 30 lakhs per annum,” the letter said.  On Wednesday, Air India had said fuel reimbursement will stand reduced by 10 per cent. Therefore, the letter said: “This is an insignificant cut on a completely frivolous entitlement which serves to highlight the senior management’s self-serving approach instead of meaningful cost cutting measures.”

The letter mentioned: “It is not only unprincipled for the senior officials to exclude their perks, eligibilities and entitlements from the austerity measures but also irrefutable proof that the intent of the management cost cutting measures is to further the agenda of abusing employees under the guise of the epidemic.”

In another step to rationalise staff costs, the airline issued an internal order on July 14 asking its departmental heads and regional directors to identify employees, based on various factors like efficiency, health and redundancy, who will be sent on compulsory leave without pay (LWP) for up to five years. Moreover, the carrier said employees can voluntarily opt for the LWP scheme too.

The national carrier has a debt of around Rs 70,000 crore and the government started the process to sell it to a private entity in January. Air India’s net loss in 2018-19 was around Rs 8,500 crore. The aviation sector has been significantly impacted due to the travel restrictions imposed in India and other countries in view of the coronavirus pandemic. All airlines in India have taken cost-cutting measures such as pay cuts, LWP and firing of employees in order to conserve cash.

For example, on July 20, India’s largest airline IndiGo had announced it would lay off 10 per cent of its workforce due to the economic crisis caused by the coronavirus pandemic. India resumed domestic passenger flights from May 25 after a gap of two months due to the pandemic. However, the airlines have been allowed to operate a maximum of 45 per cent of their pre-COVID domestic flights.

The occupancy rate in Indian domestic flights has been around 50-60 per cent only since May 25. The scheduled international passenger flights continue to remain suspended in the country since March 23.  However, Air India has been operating a significant number of special flights to and from countries around the world under the Vande Bharat Mission to help stranded people reach their destinations.

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