National Aviation Company of India Limited (NACIL), the public sector entity that owns Air India, will be offering a voluntary leave-without-pay scheme to 15,000 employees — around 46 per cent of its staff strength — to help the financially-strapped airline save over Rs 75 crore annually.
The airline was formed through a merger of the state-owned international and domestic carriers Air-India and Indian Airlines last year. The airline is projected to make losses of Rs 2,500 crore this fiscal. It has a domestic market share of 14.1 per cent. "Of the 32,000 employees on our rolls, pilots, crew and the engineering workforce will be kept out of the scheme,” said a senior Air India official. The official added that the scheme will cover middle and lower management but exclude top management.
The scheme allows employees to take leave without pay for three to four years and then rejoin the organisation. Although employees who opt for this scheme will not receive salary or productivity-linked incentives they will continue to earn medical and other benefits during the leave period.
Company officials said the expected savings are based on the assumption that only around 1,500 employees will opt for the scheme. The average annual cost-to-company per employee is being taken as Rs 5 lakh, a senior official in NACIL's finance department said.
But the unions are sceptical. "We are not aware of any such move. If it happens without our consent we will aggressively protest," said J D Kadyan, general secretary, Air Corporation, Employees Union.
Around 1,100 employees had responded to a similar scheme by Air-India, which was then the flag carrier, in 1998. The airline also offered a Voluntary Retirement Scheme (VRS) in 2002, to which around 500 employees had responded.
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The merged airline’s wage bill accounts for about 20 per cent of expenditure, second to fuel costs, which account for around 45 per cent. Rival carrier Jet Airways wage bill accounts for 10 to 11 per cent of expenditure.
The official said Air India’s employee-to-aircraft ratio of 200:1, which is one of the highest in the world, could also sharply improve if the scheme is approved.
“In the last two years, we have brought it down from 350 employees per aicraft. A comfortable number for us would be 150 employees per aircraft,” said the official. Jet Airways, the country’s largest private carrier, has a ratio of 1:150, which is in line with the global average.