The government has decided to stop paying productivity-linked incentive (PLI) — accounting for around 70% of the salary of Air India pilots and engineers — from July 1.
The move to help the loss-making state-owned airline bring down its Rs 3,700-crore annual wage by Rs 250 crore comes a day after Hindustan Times reported that the oversight committee, monitoring AI’s turnaround plan, had threatened to stop further equity infusion till it stops paying the incentive.
One of conditions set in the plan, approved by cabinet, was to freeze payment of the incentive till the airline turns profitable. The government committed to paying Rs. 30,000 crore till 2020 to keep the carrier afloat. AI has already got Rs. 2,574 crore this year.
From July 1 onwards, employees will be paid salary and allowances according to the department of public enterprises guideline stipulating that allowances cannot be more than 50% of the basic pay.
“The aviation ministry will approach cabinet for payment of flying allowances and some other allowances to be paid to the pilots, licensed engineers and cabin crew as per the industry standard,” said a government statement.
It said profit/productivity-related pay would be introduced in place of the incentive. But the pay will be determined on the achievement of key performance indicators, such as yield, aircraft utilisation, passenger load factor and on-time performance.