AI proposes 50 pc cut in incentives

Sources confirmed to The Indian Express that the aim was to prune manpower costs by at least Rs 500 crore. The reduction in PLIs of employees is also part of the larger plan to be submitted to the government to secure funds for the carrier. “The cut in PLIs will be across the board and involve all,” said a senior AI official after the airline’s board meeting in Mumbai.

Sources familiar with the happenings at the meeting told The Indian Express that the airline had been instructed by the PMO to reduce its wage bill and as a result the cut in PLI of employees has been announced. “Primarily the meeting was convened to convey the government’s instruction to cut the airline’s wage bill. As a result,a 50 per cent cut in the PLIs has been sought for,” said an Air India official who was present at the meeting.

The Air India board also decided that an alternative to the reduction in PLIs of employees will be announced in the next three months.

It has also been decided by the board that the new formula which will govern the employees’ PLIs will be based upon the company’s expected performance in terms of on time performance,yields,seat factors,operating margins and profitability.