Air India is to again start the process of negotiations on productivity-linked incentives (PLI) in pay with the staff unions. Earlier meetings held to agree on an amount to cut from salaries have not yielded satisfactory results.
"We will be meeting the unions soon and are hopeful that we will agree to a percentage, as all the employees also want the airline to survive," said a senior government official.
The official also added that any cut in PLI would be across the board, and no move to cut the incentive completely is being contemplated.
The airline's annual wage bill is Rs 3,100 crore and PLI constitutes 40 per cent of that. The airline, in its attempt to cut cost, first announced a 50 per cent cut across the board, which was objected to by the unions and the airline had to roll it back.
Its India's second attempt to cut incentives of its top 7,000 employees by up to 50 per cent was objected to by the executive pilots. They stopped coming for duty, leading to crippling of the services, and the airline had to face losses of Rs 80 crore.
The airline management then rolled back the cut and constituted a committee to look into the issues raised by the executive pilots.
AI is facing operational losses of Rs 4,000 crore annually and will receive Rs 400 crore as government aid by January next year.
A group of ministers headed by Finance Minister Pranab Mukherjee is discussing the bailout of the airline and recently allowed equity infusion of Rs 800 crore in the carrier. The GoM has also set a target for the airline to save costs of Rs 2,000 crore by this financial year-end.