Monday, April 07, 2014

Air India proposes 15% pay cut for pilots

NEW DELHI: Air India has proposed to cut the salary of its pilots by up to 15%, a move that could lead to another round of industrial action just ahead of the coming summer holiday travel season. The largest cut will be for executive commanders of wide body aircraft, with their monthly pay dropping from Rs 8.8 lakh to Rs 7.5 lakh. Fresh co-pilots of wide body aircraft, who are earning Rs 2.3 lakh per month, could get away with a cut of just over Rs 1,000.

While pilots' union has rejected the new structure, the airline management says it has given them 21 days to respond. "The final salary structure will be decided only after consultation with pilots is over. We have limited the cut to 15% and tried to find the least painful way," said an official. Loss-making AI is surviving on taxpayers' money with the government pledging Rs 30,000 equity infusion over the next decade.

The airline has an annual salary bill of Rs 3,200 crore and expects to cut it by Rs 250 crore through a leaner wage structure. Of the total wage bill, pilots get Rs 1,100 crore and AI wants to save Rs 150 crore through the new structure.

However, even the proposed new wage structure will not lead to immediate pay parity between pilots of erstwhile Indian Airlines (narrow body fleet) and Air India (wide body fleet). "We have limited the cut to 15%. Supposing someone's salary was to be cut 20% or 25%, the portion beyond 15% has been termed as 'unabsorbed cost to company'. The future salary hikes or promotion will be adjusted against this unadjusted CTC," said the official.

So, when will pay parity happen? "It will take two to three years under this formula. Ultimately, the only difference between a captain and co-pilot of wide body and narrow body aircraft will be Rs 50,000 and Rs 25,000 per month, which will be the wide body allowance paid over and above a common salary to pilots of bigger planes," said the official.

Meanwhile, pilots have rejected this pay proposal. "Other airlines, both Indian and foreign, pay more to pilots. With this pay structure, the airline management has ensured that AI witnesses an exodus of pilots to other airlines. Tata-Singapore, Tata-AirAsia, Etihad, Emirates and IndiGo are hiring like crazy. Does the management want to have an airline without any good pilots as the best will leave. A pilot of IA and AI flying a plane together will continue to be paid differently for the same work and this is not acceptable," said a pilot.

The Indian Commercial Pilots Association (ICPA) of erstwhile IA pilots is the only pilot union in the airline. The union of AI pilots was disbanded when their pilots went on strike two years back. In a communication to its members, ICPA has rejected the proposed pay structure and vowed it will not accept anything "less than the prevailing market rates". It has called an emergency meeting to decide the future course of action.