Cabinet to take call on AI wage cut soon

The Civil Aviation Ministry will soon seek the Cabinet’s approval for allowing the management of the beleaguered national carrier, Air India, to re-negotiate its different wage agreements with all trade unions. The phenomenal wage bill of the National Civil Aviation Company Ltd (Nacil) or Air India is at the crux of its turnaround plan.

Nacil employs around 31,000, much more than the ideal number for an airline of its size and has been struggling to trim its workforce. Salaries and wages account for almost 17 per cent of Air India, but any move to prune salaries results in a huge political outcry with unions immediately holding out a threat to strike work.
According to senior government officials, the ministry is sure that only after the Cabinet backs any such decision will the management be able to pull through a wage rationalisation plan. Air India employee wages are about 15-20 per cent higher than its nearest rivals Jet Airways and Kingfisher, they said. Seeking the Cabinet’s permission for such a mandate for Air India will be part of a proposal being prepared by the ministry for release of the second instalment of Rs 1,200 crore to bail out the carrier. Air India’s bailout plan was earlier approved by a group of ministers.

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