Air India pays pilots, engineers illegal wages | india | Hindustan Times
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Air India pays pilots, engineers illegal wages

Air India wants a bailout of up to Rs 15,000 crore from the Govt, but for three years it has paid some employees wages to which they were never entitled. These wages were in the form of an incentive scheme and were often several times the basic salary. They were paid without Govt clearance and contributed to its worsening finances: Its accumulated losses are Rs 7,200 crore as of end-May. Lalatendu Mishra reports.

india Updated: Jun 30, 2009 11:28 IST
Lalatendu Mishra

Air India wants a bailout of up to Rs 15,000 crore from the government, but for three years it has paid some employees wages to which they were never entitled.

These wages were in the form of an incentive scheme and were often several times the basic salary. They were paid without government clearance and contributed to its worsening finances: Its accumulated losses are Rs 7,200 crore as of end-May.

<b1>“The productivity-linked incentive scheme of Air India has not been approved by its board or by the government,” SK Chhikara, undersecretary in the ministry of civil aviation, had written to the airline in end-2008.

HT is in possession of documents that show that the airline ignored government directions asking it to stop these payments.

All employees except pilots and cabin crew are entitled to payments under the scheme, but aircraft maintenance engineers and service engineers have been the main beneficiaries of the largesse. An airline spokesperson declined to share information on salaries and urged HT to wait for the findings of a panel on wage agreements.

Here’s just one example of how Air India is making payments under the productivity scheme. Maintenance engineers get a Rs 9,000 per month allowance, called “qualification pay”, for the approving the airworthiness of particular types of aircraft. Most maintenance engineers in Air India are paid Rs 54,000 per month for “approving” six types of aircraft.

The catch: Air India operates only four types of aircraft.

“These illegal payments should be recovered from them,” a union leader said on condition of anonymity.

Executives (engineers who have risen up the ranks) also get paid when they do no certification at all. The Comptroller and Auditor General, the financial watchdog for government organisations, had questioned this scheme in 2008.

"A rationalisation of the (incentive) system will bring down the wage bill substantially and reduce – and, in some cases, perhaps eliminate – the need for pay cuts among large sections of employees,” said a senior union member who requested anonymity.

Air India declined to share details of incentive payments or reveal its share in the Rs 3,000-crore annual wage bill.

According to norms laid down by the Department of Public Enterprises, which oversees public sector units across the country and fixes the remuneration of public sector employees, allowances should not exceed 50 per cent of the basic pay of any employee.

"But in several cases, the incentive component is several times the basic salary and could be Rs 2 lakh per month for an engineer or an executive,” said a senior airline official.

Trade unions have a stranglehold over Air India, which has 210 employees for each of its 147 aircraft, employing one in three people in India’s aviation sector.

Unions representing pilots, maintenance engineers and service engineers are stronger and negotiate better wages for members. Air India employees, who didn’t want to be identified, said the incentive system favours pilots, maintenance and service engineers more.

When contacted, office bearers of the maintenance association declined comment.