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January salaries delayed; airline also working on proposal to trim pilots' pay 15-20% by doing away with performance-linked incentives
State-run airline Air India on Friday issued a circular to employees, saying reporting late would lead to salary cuts. The move is said to have been aimed at tightening the screws on cases of indiscipline by employees – seen as a major reason behind flight delays and mounting losses.
The circular, which comes on a directive of the civil aviation ministry, covers all cabin crew, engineers, ground handlers and pilots. Air India has about 13,000 employees, excluding the engineering and ground-handling arms.
“Delays in flights are causing monetary losses, besides a loss in reputation of the organisation. Accountability for delays has to be fixed and all concerned have to be sensitised. In case of delays occurring on account of late reporting, or delays, the loss caused would be recovered. Salaries shall be paid only after related deductions have been effected,” said the order, effective February 1, 2015.
The development comes on a day when the loss-making carrier also put out a notice saying January salaries will be delayed by a few days to February 3 or 4. Additionally, Air India is also working on a proposal to cut pilot salaries by 15-20 per cent by removing performance-linked incentives.
“While delays happen on several reasons such as late arrival of aircraft and weather, late reporting by crew accounts for 10-15 per cent of the total delays. As a result, our on-time performance (OTP) has been severely getting impacted over the past few months,” said a senior executive of the airline.
He added that the penalties would be fairly decided by a panel set up under an executive director who would see if the delay was due to controllable factors. The company hopes that this will help reach the target OTP of 75-80 per cent. In December, Air India was the worst performer with OTP of 59.8 per cent, versus market leader IndiGo’s 77.1 per cent and GoAir’s 73.4 per cent.
The move has already raised the hackles of employees who fear it might be misused. KVJ Rao, general secretary of the All India Cabin Crew Association, has replied to the company saying that the management should also be held responsible. “The circular only seeks to hold the workmen category of the employees responsible and accountable. It would not be out of place to mention that delays of flights are due to the mismanagement at the management level,” Rao said in a letter.
A senior Air India captain added, “If there is an ATC delay, will Air India stop payment to the Airports Authority of India by the same logic? There is a 25 per cent cut in salary, recruitment is not taking place and new routes are not being developed and now the government wants to implement this. This is ridiculous.”
Air India, the second-largest domestic airline with 18.4 per cent market share in 2014, had a record load factor of 85.9 per cent in December.
After Civil Aviation Minister P Ashok Gajapathi Raju issued a 26-point guideline for the turnaround of Air India last year, the airline has revisited and recast standard workforce parameters. According to a reply to a Parliament question dated December 8, 2014, OTP is being monitored twice a day by the CMD while the aircraft/anpower ratio has been reduced to 1:125 from 1:264. Air India is also submitting monthly reports to the government on delays beyond 30 minutes, on route-wise profitability and on financial performance.
Excluding the ground-handling and engineering subsidiaries, Air India had a wage bill of Rs 3,100 crore (Rs 31 billion) in 2013-14, even as it posted a net loss of around Rs 5,000 crore (Rs 50 billion) on revenues of around Rs 17,750 crore (Rs 177.5 billion) in the fiscal.