NEW DELHI: Air India's new pay structure will take at least a year to
get implemented, as the airline will require additional government
approvals for harmonising wages of the licensed category-employees,
which is likely to cause deviation from Department of Public Enterprises
(DPE) norms, a senior civil aviation ministry official said.
The government is in the process of harmonising AI's wage structure
on the principles laid down in a report submitted by a committee headed
by a retired Supreme Court judge, Justice D Dharmadhikari.
"The Dharmadhikari report recommends strict adherence to DPE
guidelines but in case of licensed categories (pilots and engineers), it
will have to deviate from the norms for state-owned companies as the
market-rates for pilots will have to be doled out," a senior civil
aviation ministry official said.
Meanwhile, the Dharmadhikari Committee has also recommended setting
up a committee of airline-related professionals to ensure implementation
of wage parity and level-mapping of employees in a time-bound manner.
"If the mere implementation takes five years, it will be a waste. It
will not be able to solve employee issues," the official said. The
government is also likely to appoint consultants to see that the wages
are rationalised in a proper manner.
When asked if there will be any salary cuts, the official said,
"rationalisation is a two-way process where some people will have to
come down and some others will be brought up."
The Dharmadhikari Committee report has also recommended monetisation
of Air India's assets, which not only includes renting out space at
prime locations like the airline's head office at Nariman Point, Mumbai
and the booking office near Jor Bagh, New Delhi, but also airport
lounges.
"The rent can be used to cover maintenance and employee costs and idle resources can be utilized," the official said.
Meanwhile, the report suggested to do away with the
performance-linked incentives (PLIs) component of employee salaries as
according to DPE guidelines, only a profitable enterprise can dole out
this incentive.
The Comptroller and Auditor General (CAG) of India had also found
Air India Board guilty of approving an increase in various allowances,
including PLIs, by up to 50% with effect from January 2005, even though
the financial position of the company was not sound and depended on
loans for working capital.
The cut-off date for wage harmonisation will be taken as April 2007,
when the merger had taken place and would apply to 26,000 Air India
employees, who are on the company's payrolls. The exercise will not
cover about 8,000-10,000 contractual employees.
Almost 80% of Air India's annual wage bill of around Rs 3,000 crore
is distributed among 15-16% employees whereas the remaining accounts for
the salaries of the rest of the large workforce.
Recently, the government has restructured 21,000 crore of Air
India's total loans amounting to Rs 43,000 crore and has also given the
loss-making carrier equity infusion of Rs 30,000 crore over the next
eight years.
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