No layoffs, rationalization of allowances implemented, says Air India amid Covid-19 crisis

The decision was taken in a meeting of the Air India board and the Ministry of Civil Aviation, the airline wrote in a tweet.

"Recent decisions of AirIndia Board regarding rationalization of staff cost were reviewed in a meeting at @MoCA_goi  this evening.The meeting reiterated that unlike other carriers which have laid off large number of their employees,no employee of AirIndia will be laid off," the airline informed in a series of tweets.

The airline said that owing to the difficult financial condition in the aviation sector, the board has decided to implement "rationalization of allowances" without reducing basic pay.

"There has been no reduction in the Basic pay, DA and HRA of any category of employees. The rationalization of allowances had to be implemented on account of the difficult financial condition of the airline that were exacerbated by COVID-19," the tweet read.

"Flying crew will be paid as per the actual number of hours flown. As domestic and international operations expand to reach pre-COVID levels and the financial position of Air India improves, the rationalization of allowances will be reviewed," another tweet added.

As a part of its cost-cutting measure, Air India has slashed the pay of its cockpit and cabin crew with retrospective effect from April 1, 2020, till further orders.

While the national carrier said the salary was reduced by 40 pct, employees have claimed it to be as high as up to 85 pct.

The government's decision to reduce the salary of pilots is "discriminatory, disproportionate and arbitrary and could have a disastrous psychological impact which could trigger 'desperate and extreme acts,' as has been repeatedly proven many times in the past," senior pilots wrote in a letter to Civil Aviation Minister Hardeep Puri.

"This has had a 'devastating effect' on their family members," said the letter, protesting the government's decision to drastically cut pilots' salaries.

According to reports, Air India has a debt of  Rs. 70,000 crores. The Centre has been trying to sell off the airline but stuck no deal as yet.

Last week, Air India Chairman and Managing Director (CMD) Rajiv Bansal had said that the carrier was taking effort to bring down costs by reducing debt, aircraft lease rentals, as well as staffing and operating expenses.

The aviation sector across the globe has been badly hit due to the pandemic with all countries imposing a travel ban to contain the spread of the contagion, which originated in China's Wuhan.

Several carriers have been also forced to layoff employees to deal with the financial crisis. India's largest private airline IndiGo recently said it will lay off 10 per cent of its staff.

(Image credit: Air India Twitter Page)