Companies

Air India to save over ₹7 cr annually from wage bill as 60 employees take leave without pay

Ashwini Phadnis New Delhi | Updated on October 09, 2020 Published on October 09, 2020

Air India’s annual wage bill is about ₹3,000 cr; Minister for Civil Aviation Hardeep Puri has said AI has cut operating costs by ₹1,500 cr annually

Air India will be saving over ₹7 crore annually from its wage bill, with 60 employees, including one from Alliance Air, taking up the airline’s leave without pay (LWP) offer. The airline came up with the LWP offer in July this year for six months to two years, extendable up to five years.

Air India’s annual wage bill is in the region of ₹3,000 crore. The airline has over 12,600 employees, of whom about 8,500 are permanent and 4,100 on contract.

A senior airline official told the BusinessLine that the the average salary of the employees who have opted for LWP has been taken at ₹1 lakh a month, totalling up to ₹7 crore.

Also read: Domestic airlines will be allowed to operate up to 75% of pre-Covid capacity soon: Puri

The official indicated that the LWP scheme could be reintroduced to gauge whether more employees opt for it.

In addition, about 20 employees have opted for the shorter working week option. This was another option provided when the LWP scheme was introduced.

This is among the various steps taken by the airline to curtail its losses. Minister for Civil Aviation Hardeep Puri has said that the airline has been able to cut operating expenditure by about ₹1,500 crore annually.

However, these steps are only having a limited effect. On an assessment of how its operations would pan out in 2021, the airline estimated that the first half of the year (April-September 2020) would be very challenging, with revenue at 25 per cent of pre-Covid-19 levels.

Also read: SpiceJet to start flying to London from Delhi, Mumbai from December 4

“In Q3, we expected that our operations will be about 50 per cent and Q4 about 75 per cent of pre-Covid-19 levels compared to the previous financial year 2019-20,” Rajiv Bansal, Chairman and Managing Director, AI, said. He added that the airline is “pretty much” at par with its projections. “We had predicted that in the half year we will have 25 per cent revenue, and we have achieved that,” he added.

He added that revenue from flights under the Vande Bharat Mission and domestic flights is intertwined, and hence, it is difficult to arrive at separate figures for the two.

“Our monthly revenue ranges from about ₹600 crore to ₹1,000 crore. In some months, it has been up and in some months it has been a bit moderate,” Bansal said.

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Published on October 09, 2020
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