Chinmayi Shalya/TNN

Mumbai, Jun 20: After announcing that all employees will receive their wages 15 days late next month, Air India on Friday asked its top managers to set an example for the rest of the company. Corporate directors, executive directors and GMs were 'requested' by the new AI chairman Arvind Jadhav, to forego salaries and incentives for July to "ease the liquidity crunch faced by the airline".

"The top management needs to indicate to all employees that every single paisa which can be saved needs to be saved. As a gesture to ease the liquidity crunch faced by the airline, Mr Jadhav has requested all executives in the level of corporate directors, general managers and executive directors to forgo their salaries and productivity-linked incentive payable in the month of July 2009," an AI press statement said on Friday. The new directive to save money will affect more than 150 senior management staffers.

This decision comes almost a fortnight after AI announced an upward pay revision for its officer-grade cabin crew. The government had mandated a pay revision in 2004, but the agreement on salary allowances was entered into only recently. As per conventional estimates, the pay hike, which comes at a time when AI is in the news for its "cost-saving" initiatives, would cost the airline Rs 2 crore annually.

Sources added that a bailout package was being worked out for the public sector airline, but no details were available at this stage.

Earlier this month, the airline announced a decision to defer the wages of all its 30,000 employees by 15 days in July. The decision has drawn much flak from various unions of the airline, which also staged a protest against the management on Friday morning. Almost 500 employees in Mumbai affiliated to three AI unions - Aviation Industry Employees Guild (AIEG), Air Corporation Employees Union (ACEU) and Indian Air Technicians Association IATA - protested at the two airport terminals at Sahar and Santacruz and also outside the airline's office at Kalina. Almost 19,000 employees participated in the demonstration at airports across the country. There was, however, no effect on flight operations.

Unions threatened strike if the airline stuck to its decision to defer wages. "Top management employees can afford not to have one month's salary. But employees of other grades cannot afford to get paid after half a month," said J Kadian from ACEU.