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Home > India > Business > Business Headline > Report

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Leave without pay for NACIL staff to reduce losses

October 17, 2008 03:10 IST

National Aviation Company of India Limited, 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.


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