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Air India says no layoffs, justifies allowance cut

There has been no reduction in the basic pay, DA (dearness allowance) and HRA (house rent allowance) of any category of employees, says Air India

twitter-logoBusinessToday.In | July 23, 2020 | Updated 22:27 IST
Air India says no layoffs, justifies allowance cut
Flying crew will be paid as per the actual number of hours flown, says Air India

State-owned Air India on Thursday said that no employee will be laid off like other airlines in India. The airline, however, said that some "rationalisation of allowances" have been implemented on account of the difficult financial conditions that were exacerbated by COVID-19.

The decision was taken after the Air India board held a review meeting with the Ministry of Civil Aviation regarding rationalisation of staff cost. "Recent decisions of the Air India board regarding rationalisation of staff cost were reviewed in a meeting at the Ministry of Civil Aviation this evening. The meeting reiterated that unlike other carriers which have laid off a large number of their employees, no employee of AirIndia will be laid off," Air India said on Twitter.

Earlier on Wednesday, the country's largest airline had announced a reduction in the allowances of its employees, who have a monthly gross salary of more than Rs 25,000, by up to 50 per cent. The national carrier has a monthly wage bill of Rs 230 crore.

"There has been no reduction in the basic pay, DA (dearness allowance) and HRA (house rent allowance) of any category of employees. The rationalisation of allowances had to be implemented on account of the difficult financial condition of the airline that was exacerbated by COVID-19," the national carrier said.

Also Read: Air India slashes crew salaries by 40%; pilots allege effective cut much higher

In an order on July 22, Air India said that the basic salary and allowances linked to it like industrial dearness allowance (IDA) and house rent allowance (HRA) will remain unchanged for all categories of officers.  Cabin crew members would see their all other allowances like check allowance, flying allowance and quick return allowance reduced by 20 per cent.

As per the order, 11 types of allowances - including flying allowance, special pay, wide-body allowance, domestic layover allowance and executive flying allowance - for pilots would stand reduced by 40 per cent. The order said flying allowance would be paid on actual hours flown by an individual pilot in a month.

Also Read: Ask Air India to roll back 10% salary cut: Airline unions to Puri

"Flying crew will be paid as per the actual number of hours flown. As domestic and international operations expand to reach pre-COVID levels and the financial position of Air India improves, the rationalisation of allowances will be reviewed," the airline said.

On July 14, Air India asked its departments' 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, it said employees can voluntarily opt for the LWP scheme too.

The aviation sector has been significantly impacted due to the travel restrictions amid the COVID-19 pandemic.  Several airlines in India have taken cost-cutting measures such as pay cuts, LWP and firing of employees in order to conserve cash.

A few days ago, domestic carrier IndiGo announced to lay off 10 per cent of its workforce due to the economic crisis.

By Chitranjan Kumar

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