Will the govt curb free tickets to AI staff's relatives?

New Civil Aviation Minister Ashok Gajapathi Raju has indicated that the new government could review the free passage scheme offered by cash-starved Air India to its 24,000 employees.

"There are a lot of things of concern as of now. These have to be looked into," Raju told reporters when asked about the loss-making carrier offering such a scheme which also included the relatives of employees.

However, Raju also pointed out that issues like the definition of a family under the scheme called 'Passage Entitlement-Vacation Travel' would have to be examined.

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Under this scheme, top officers like functional directors and joint managing directors are entitled to get 24 free tickets each year, while the lowest rung staffer are entitled to eight tickets annually. However, all taxes and fees have to be paid by the employees who avail such tickets.

Air India had come out with a circular in April saying the spouse of a deceased staffer could transfer his or her tickets to their children or step-children.

The scheme came at a time when the national carrier is estimating an overall annual operating loss of Rs 2,123 crore (Rs 21.23 billion) in 2013-14, down from Rs 5,200 crore (Rs 52 billion) in 2012-13 and Rs 7,560 crore (Rs 75.60 billion) posted the year before. The airline is also faced with a cumulative debt burden of Rs 35,000 crore (Rs 350 billion). 

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But senior Air India officers defended the scheme, saying it was an industry practice, globally as well as by all the domestic airlines too.

"It is a practice which is followed by all airlines world over as per IATA resolutions. All airlines operating in India, including loss-making private ones also offer this facility to their employees," senior airline officers said.

They said that after the death of an employee, the spouse can avail of the benefits, part of which he or she can transfer to the children. But after the demise of the spouse, the facility is not passed over to the next generation.

Air India officers said almost half the staff did not avail of the benefit due to high taxes and other costs involved.

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Also, whenever an Air India employee travelled on this 'Staff on Leave' (SOL) ticket, the travel was purely on 'subject to space available' basis, they said.

Prior to their 2007 merger, senior officials of the two erstwhile carriers used to enjoy unlimited domestic travel, which has now been discontinued. The new scheme prevailing now has put a cap on the free passage given to the employees, which was unlimited earlier, the officers said.

The scheme, they said, was a substitute for the leave travel concession scheme for government employees which Air India employees do not get.

In the last financial year, the entire airline staff was about 24,000.

But after 6,600 were transferred to its two new subsidiaries Air India Engineering Services Ltd and 5,300 to the Air India Air Transport Services Ltd, the airline has over 12,000 on its role. The subsidiaries were floated as part of the turnaround plan.