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

Air India has reduced the monthly allowances of its employees, who have a monthly gross salary of more than Rs 25,000 by up to 50%. The employees (both permanent and fixed-term contract) with gross salary up to Rs 25,000 have been spared of the pay cut

twitter-logoBusinessToday.In | July 23, 2020 | Updated 08:39 IST
Air India slashes crew salaries by 40%; pilots allege effective cut much higher
Air India has a monthly wage bill of Rs 230 crore

Cash-strapped airline Air India has deducted the salary of its cockpit and cabin crew with retrospective effect from April 1, 2020. This will remain in force till Air India's board of directors reviews it. Air India has claimed that it has cut only 40 per cent of the payout. However, its employees are saying that the salary cut is much higher.  In a report in Time of India, Air India's crew members said the salary cut was almost 85 per cent.

The national carrier has a monthly wage bill of Rs 230 crore.

Air India has reduced the monthly allowances of its employees, who have a monthly gross salary of more than Rs 25,000 by up to 50 per cent. The employees (both permanent and fixed-term contract) with gross salary up to Rs 25,000 have been spared of the pay cut.

According to the AI order of July 22, 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.

The Air India order said 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.

"However, as a special case, all pilots available for flying will be paid fixed 20 hours of flying allowance or actuals, whichever is higher in a month, during Quarter 1 and Quarter 2 of 2020-21 on revised flying allowance rate," it added.

All fixed-term contractual executives and staff other than pilots and cabin crew members will see their other allowances reduced by 50 per cent and 30 per cent, respectively, it stated.

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.

In its defence, Air India said its financial situation was very challenging due to the coronavirus pandemic. It added that the LWP scheme for employees was a "win-win" situation for them as well as the management.

Air India has a debt of around Rs 70,000 crore and the government started the process to sell it to a private entity in January this year. The national carrier's net loss in 2018-19 was around Rs 8,500 crore.

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 decided to lay off 10 per cent of its workforce due to the economic crisis.Also read: First coronavirus vaccines can't be expected until early 2021, says WHO

Also read: India's air passenger traffic dips 84% in June; GoAir records sharpest fall

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