The Air India board on Wednesday approved up to 50 per cent cut in the productivity-linked incentives (PLIs) for the airline's officers and executives.
"The board has approved a cut by up to 50 per cent in PLIs for officers and executives, depending upon the salaries they are drawing," an Air India spokesperson said.
A panel, set up by the Air India management to review PLI norms for the company and revise its parameters, submitted its report on Wednesday.
Earlier reports said that the Air India management would also seek the board's nod for borrowing from banks.
Air India has to save Rs 800 crore (Rs 8 billion) in a year to get the financial package. Since PLI itself amounts to around Rs 1,500 crore (Rs 15 billion) per year by way of reducing it by up to 50 per cent, the company will save around Rs 750 crore (Rs 7.5 billion) a year..
Air India is seeking a bailout package in the form of equity infusion and soft loan from the government. Air India had proposed a 50 per cent cut in PLIs/flying allowance of its employees last month.
Meanwhile, one of the employee unions in Air India complained that the entire, and misplaced, focus of the management was on slashing pay in the name of a turnaround plan.
"We are not responsible for the mounting losses. The focus of the management has been only on slashing (PLI cut of 50 per cent) employees' wages. There are many (other) options they can look at to cut cost," said Y V Raju, general secretary of the All-India Aircraft Engineers Association, according to a Business Standard report.
Employees have been getting their salaries late for the last three months (June, July and August) and "there was simmering discontent about the late-payment," Raju said.
