New Delhi, Feb 22 (PTI): Pay scales of Air India's pilots, engineers and cabin crew will now be fixed as per the industry norms with the Government approving rationalisation of their pay structure, which is likely to save over Rs 320 crore annually for the ailing carrier.

At its meeting, the Cabinet Committee on Economic Affair cleared the proposal for restructuring the pay scales of Air India's pilots, cabin crew and engineers.

This might bring down basic pay scales of these license- category employees by about 10 to 20 percent. However, their allowances would now go up, official sources said here.

While fixing the salary and allowances of the employees as per the Department of Public Enterprises (DPE) guidelines, the Justice D M Dharmadhikari Committee, which went into all HR issues including pay and seniority, had recommended that the pay structure of these licenced staffers should be decided in accordance with the industry standards.

Air India's annual wage bill stands at about Rs 3,200 crore, of which Rs 1,750 crore is spent on wage and allowances for licenced category employees such as pilots, cabin crew and engineers.

Following the recommendations of the Dharmadhikari panel, the government had abolished Productivity Linked Incentives (PLI) to Air India employees from July last year. PLI formed a major part of the pay structure of pilots, engineers and crew.

The Dharmadhikari Committee had gone into issues relating to pay-scales and career progression to bring about parity and integration among the employees of the two erstwhile state-run airlines- Air India and Indian Airlines.