Air India to send many employees on unpaid leave for up to 5 years in major move to cut cost

Air India’s board of directors has reportedly authorised the Chairman and MD Rajiv Bansal to send employees on LWP. (Bloomberg image)

In a major move of cost-cutting in the aviation sector, many employees of Air India are likely to be sent on leave without pay (LWP) for up to 5 years. The airline has started the process of identifying employees, based on various factors like efficiency, health, suitability, competence, etc, PTI reported citing an official order. Air India’s board of directors has reportedly authorised the Chairman and MD Rajiv Bansal to send employees on LWP for a duration of six months or two years, which may be further extended up to five years. 

While the departmental heads and the regional directors will assess each employee on various criteria, the names of employees chosen to be sent on LWP will be forwarded to the General Manager (Personnel) in headquarter for obtaining necessary approval of CMD. As cases related to the coronavirus pandemic started to increase in India, the government announced a strict nationwide lockdown in the last week of March. With the travel restrictions imposed, the aviation sector was among the most affected sectors and there was a complete ban on air travel. The domestic passenger flights were resumed from May 25, but the damage was already been done. 

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Meanwhile, the domestic passenger demand for air travel will contract by 49 per cent on-year in 2020, said global airlines body IATA on Monday. The rating agency Crisil also highlighted that Indian airlines are staring at Rs 1.1-1.3 lakh crore revenue loss over the next three years. Curtailed mobility of people due to the Covid-19 pandemic and related restrictions will shrink domestic air passenger traffic by 40-45 per cent and international traffic by 60-65 per cent, respectively, this fiscal, the report added.