Air India pilots say June salary received, but allowances cut by 80%

Pilots allege the cuts are higher than what was suggested by the management. A joint letter by two pilots unions - Indian Commercial Pilots' Association and Indian Pilots' Guild - had earlier claimed that while the airline has proposed to cut pilots salaries by 60 percent, 'it is hilarious to note that the top management has proposed a meagre 3.5 percent cut in its own gross salary'.

It has now come to light that the Ministry of Civil Aviation had written to Air India earlier this month, asking for rationalisation of allowances paid to pilots. It had suggested the airline reduce the allowances, including flying allowance, layover allowance and wide body allowance by 40 percent. While earlier the pilots were paid for a minimum of 70 flying hours a month  - and anything beyond that was overtime - now the minimum was down to 20 hours.

These changes were to be applicable from April 2020, and in force 'till further review,' the mail from the ministry said.

Moneycontrol has seen a copy of the mail.

'Trick of words'

Pilots now allege that while the flying allowance rate has indeed come down by 40 percent  - from Rs 2,000 to Rs 1,200 per hour - it doesn't take into account the reduction in minimum flying hours. "What about the reduction of 50 flying hours...it's just a trick of words," says a pilot.

For those on contract, their flying allowance has been reduced to Rs 900 from Rs 1,500 earlier.

Apart from these salary cuts, the airline has also commenced the process of identifying staff, based on various factors like efficiency, health and redundancy, who will be sent on compulsory leave without pay (LWP) for a period of up to five years.

The order, on July 14, said Chairman and Managing Director Rajiv Bansal has been authorised by the airline's board of directors to send employees on LWP "for six months or for a period of two years extendable up to five years..."

Apart from Air India, other airlines have also been forced to take drastic steps to cut costs. IndiGo is laying off 10 percent of its workforce and GoAir has sent almost 90 percent of its employees on leave without pay.

No other choice

While the sharp cuts in pay and allowances make it tough for pilots and other aviation personnel, observers pointed out that airlines need to take these steps to stay afloat.

"World over you have seen airlines cutting costs by laying off or selling fleet and bringing in new planes that consume lesser fuel and are cheaper to maintain," said Mark Martin, founder of aviation advisory firm Martin Consulting.

But the situation is slightly different in India. "Most of the airlines have a young fleet that doesn't need to be replaced. While they can re-negotiate lease rentals and bring down costs, the other way to cut expenditure is by reducing the wage bill," he said.

In the case of Air India, Martin pointed out, over 60 percent of revenues came from international operations that are yet to resume. "The Vande Bharat Mission flights that Air India operates make for only about 10-11 percent of its original international schedule," said Martin. Thus, he said, it may not make sense for the airline to keep paying allowances to pilots that are connected to long haul flights.

While debates over pay cuts rage on in the industry, the two pilot unions have vowed to continue raising the issue. They have alleged that the Air India management hasn't consulted them before taking steps on leave without pay, or salary cuts.