Air India offers staff leave without pay

Battling serious problems and under pressure to restructure, Air India on Thursday announced a voluntary leave without pay scheme for its employees and the setting up of a committee with representatives from both the management and unions to turnaround the airline's operations.

The scheme allows a permanent employee to take leave for up to two years without pay or allowances and return to join at the same level where he or she left, an AI notice issued said.

The decision of the management comes a few days after the unions suggested several schemes, including leave without pay to cut costs while maintaining the interests of the employees.

In Mumbai, the airline announced it has set up a committee comprising representatives of the management and the unions to turn around the airline.

The committee would identify key areas of cost-savings for the airline and would give a presentation about this to the management on July 3, AI spokesperson Jitendra Bhargava, told reporters.

This committee will be in addition to the nine joint committees which have been set up by Air India to look into the various issues relating to the national air carrier.

The decisions came a day after Prime Minister Manmohan Singh's assurance to the beleaguered airline of complete backing, but with a rider that it would immediately restructure by cutting costs and flab and overhaul its top management to become 'leaner and trimmer.'

In Mumbai, employees union hardened their stand saying there cannot be any renegotiation of the wage agreement with the management.

"We have told the management that we will not renegotiate the agreement on wages," a National Aviation Company of India Ltd union leader said.

The airline is seeking a hefty Rs 18,000 crore (Rs 180 billion) stimulus package from the government. Its working capital requirement rose from Rs 2,369 crore (Rs 23.69 billion) in March to Rs 16,300 crore (Rs 163 billion) in May.