NEW DELHI: The fate of passengers scheduled to fly Air India July 1 onwards seems as uncertain as that of the airline itself. On Monday, the
cash-strapped national carrier announced wage cuts to reduce its annual salary bill of Rs 3,100 crore for more than 31,000 employees by Rs 500 crore. This announcement, intriguingly made hours before a high-level meeting called by a worried PMO to discuss AI’s survival strategy, could provoke the unions to dig in their heels.
Aside from token demonstrations, unions had threatened to go on strike to protest the earlier decision to delay payment of salaries until mid-July. “We were earlier told that salaries would be deferred by 15 days. Now the airline has issued a statement that wages will be cut, though we have not been told anything formally. Our protest schedule is drawn up till June 30 and what we are forced to do after that, like going on indefinite strike or something else will be decided in the coming days,” said V J Deka, secretary of the Aviation Industry Employees’ Guild that represents 7,800 AI employees.
In the statement announcing wage cuts, AI “reiterated its resolve to maintain its flights as per normal schedule and urged passengers to book for their travel on its flights as usual”. However, the airline industry says looming uncertainty could cost AI dear.
“Since the formation of a stable government, air travel has seen some revival. But AI has got a disproportionately low share of that growth that has gone mainly to private players. If there’s even a fear of a strike, their bookings will get seriously affected,” said Ankur Bhatia, MD of Bird Group, India’s largest airline ticketing IT service provider.
AI, which has been steadily losing market share apart from Rs 15 crore daily, is seeking a bailout package from the government. On Monday, AI CMD Arvind Jadhav met the PM’s principal secretary, T K A Nair, and aviation secretary M M Nambiar and is learnt to have pressed for a government lifeline. The aviation team reportedly spelt out steps such as deferring delivery of some widebody planes this year and cost-cutting measures such as wage cuts. The idea: convince the government to part with taxpayers’ money to resuscitate the Maharaja.
“There was serious discussion. We still have to work out a proposal for the government, possibly a full-fledged Cabinet note, that has the roadmap for AI,” said a senior official. Jadhav, under Nambiar’s guidance, has worked out a survival strategy that will be shown to aviation minister Praful Patel once he returns from London — on AI — on Tuesday.
Being a public sector enterprise, laying off is not going to be easy for the grossly overstaffed airline that has around 31,500 employees. Arguing for wage cuts, the airline’s statement pointed out to employees that it had not resorted to retrenchment or layoff “till date”. It has formed a four-member panel to examine wage agreements, including flying allowances and productivity-linked incentives, entered into with the unions. The panel is to submit its report by July 15.