AI lands Rs 1200 crore equity infusion
New Delhi: Government today approved the infusion of the second tranche of equity of Rs 1,200 crore to ailing Air India with the condition that its management should rationalise the wage structure of over 25,000 employees.
Announcing the decision of the Cabinet Committee on Economic Affairs for further equity infusion, Civil Aviation Minister Praful Patel said, "This will not only help restructuring the airline, but will also shore up its finances".
The first tranche of equity infusion of Rs 800 crore was made in February this year for its revival plan.
"The infusion of enhanced equity fund would give the much-needed impetus to Air India for its revival plan", an official statement said.
Sources said the equity infusion was being made in a phased manner as it was based on the performance parameters of Air India.
The official statement said the CCEA, while granting additional equity, 'directed Air India management to work towards rationalisation of wage structure'.
With the CCEA directive aimed at cutting costs, the National Aviation Company of India Limited (NACIL) received the official nod to go ahead with its plans to review and re-negotiate all agreements with its 14 unions.
Two of these unions were de-recognised following a flash strike three days after the May 22 plane crash in Mangalore this year.
At present, there are 10 wage agreements signed between these unions and the management.
The employees' unions have been opposing moves to slash wages or allowances, contending that the airline's wage bill was only 18 per cent of the total turnover, as against a global average of about 22 per cent for most international carriers.
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