Air India staff may get pay hike with new contracts

Under the terms of the Air India sale in January 2022, Tata Group had to retain all employees for at least a year at pre-existing salary levels. With the new job contracts taking effect this financial year, many employees in non-operational departments such as human resources and finance will see their salaries increase since they will be indexed to private sector pay scales.

“Air India’s pay structure has been similar to any government company’s pay structure. In that structure, a young employee may be getting similar or a little more as compared to a Group D employee (peon, drivers etc.). So while salaries may increase for many, people in lower groups may not benefit so much,” one of the two people cited above said on condition of anonymity.

“The plans are to bring out such changes in the current financial year. This is along with the plan to offer a second voluntary retirement scheme (VRS) to employees,” the second person added.

Air India, in an email response to a query, said it “would not like to elaborate on this,” adding, “However, there is no immediate change happening. We will need to wait for further developments post-merger”.

The Tata group inherited over 8,000 Air India employees from the government. About 1,350 of them opted for VRS in July last year and left the airline and a second VRS is open till 30 April 2023.

While Air India estimates that about 2,000 employees across departments would opt for the second VRS, many may stay away till there is clarity on the new pay structure.

“It would be easier to make a decision on VRS if we have a sense of our remuneration in the future, and many would be waiting for new contracts. They may not opt for VRS till there is clarity on the new salary structure,” a third person said.

Along with the new pay structure and VRS, Air India has also completed an employee share benefit scheme for permanent employees, issuing 980 million shares worth about a 3% stake in the airline.

Under the scheme, employees must pay 27 paise plus taxes for a share, and the book value has been set at 87 paise per share. The scheme is implemented by SBI Caps Trustee Co. Ltd.

The airline is also likely to offer up to a 10% hike to pilots and cabin crew, essentially to retain talent at a time airlines worldwide scout for workers.

Air India has plans to expand using leased aircraft as well as inducting new planes from its 470 aircraft order.