Day after allowance-cut, Air India says no employee to be laid off

A day after announcing reduction in the allowances of employees with monthly gross salary of more than ₹25,000, Air India on Thursday (July 23) said that unlike other airlines that have laid off a large number of workers, no employee of the national carrier will lose job.

The statement comes days after budget carrier IndiGo, the largest airline of the country, announced that it would lay off 10 per cent of its workforce due to the economic crisis caused by the coronavirus pandemic. Nearly 2,500 IndiGo employees are likely to lose job amid the pandemic, it is being estimated.

“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 Air India will be laid off,” the national carrier said on Twitter.

On Wednesday, Air India announced reduction in the allowances of its employees, who have a monthly gross salary of more than ₹25,000, by up to 50 per cent.

There has been no reduction in the Basic pay, DA and HRA of any category of employees. The rationalization of allowances had to be implemented on account of the difficult financial condition of the airline that were exacerbated by COVID-19.(2/3)

— Air India (@airindiain) July 23, 2020

“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 explained on Twitter.

The flying crew will be paid on the basis of the actual number of hours flown, it added. “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.

In another step to rationalise staff costs, Air India issued an internal order on July 14, asking its departmental heads and regional directors to identify the employees, based on various factors such as efficiency, health and redundancy, who will be sent on a 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 imposed in India and other countries in view of the pandemic. All airlines in the country have gone for cost-cutting measures such as pay cuts, LWP and firing of employees in order to conserve cash.

Related news: Air India to send a few employees on leave without pay for up to five years

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

India resumed domestic passenger flights from May 25 after a gap of two months due to the pandemic. However, the airlines have been allowed to operate a maximum of 45 per cent of their pre-COVID domestic flights. The occupancy rate in Indian domestic flights has been around 50-60 per cent since May 25.

The scheduled international passenger flights continue to remain suspended in the country since March 23. However, Air India has been operating a significant number of special flights to and from countries around the world under the Vande Bharat Mission to help stranded people reach their destinations.

(With inputs from agencies)