Moving quietly, private air-carrier, Kingfisher Airlines, has effected a Rs 80,000 cut in the salaries of all its pilots.

"Earlier, we were being paid a salary of Rs 4.30 lakh (Rs 430,000) per month. Now it has been cut to Rs 3.50 lakh (Rs 350,000), all in the name of integration (with the erstwhile Deccan)," a Kingfisher pilot told PTI here on condition of anonymity.

The salary package is mainly based on the flying hours of about 70 hours, he said, adding that "the whole package has been revised downwards in the name of bringing parity with the erstwhile Deccan pilots."

Kingfisher's management, while slashing the salaries, has taken the defence that it was only implementing the Deccan-Kingfisher package structure in Kingfisher post-the merger, the pilot said.

The pay-cut, effective for sometime now, is understood to have given rise to resentment and heartburn in Kingfisher's pilot community.

A spokesperson of the Vijay Mallya-led airline confirmed the pay-cuts but said that it was the result of a move "towards a productivity-linked compensation structure, which is the international norm.

"Following a 21 per cent capacity reduction, the pilots' flying hours have been reduced substantially post-merger. In such a situation, we are not getting the same amount of flying as earlier," he said.

Mallya's airline, which has posted losses of Rs 626 crore (Rs 6.26 billion), is struggling hard for survival, with both load-factor and yield declining sharply.

Simultaneously, its dues to oil marketing companies, the Airports Authority of India and other agencies are steeply mounting. The dues are estimated at around Rs 1,000 crore (Rs 10 billion). Faced with this situation, Mallya has now deferred his expansion plans. He is presently scouting for overseas investors to pump funds into his airline.

He was the first air-operator to suggest that the government allow foreign air-carriers to invest in domestic ones. Union Civil Aviation Minister, Praful Patel, has also supported the move and and the Government is understood to be working on a proposal to relax foreign direct investment norms in the domestic aviation sector.