Posted by: qmaxim | October 2, 2009

Who says public sector in India pays poorly?

Read the article below on Air India which appeared recently. Air India is thousands of crore in the red, but not the employees. Who says public sector employees are paid poorly.? Pilots even get an allowance called RVSM (hold your breath) for maintaining safe distance between aircraft while flying. (1 crore = 10 million, 1 USD = 48 INR approximately).

Read on..

Maharaja’s Rich Subjects

Not only is Air India overstaffed, some of its officials are overpaid — 5 per cent hog a fourth of the wage bill

By Anjuli Bhargava

Swallow this: Air India has 1,790 employees who earn over Rs 24 lakh a year. That is 5.6 per cent of its total 32,000 employees. The total wage bill for these 1,790 employees is around Rs 800 crore. In other words, nearly a fourth of the total salary paid annually goes to just 5.6 per cent of the staff. Of this, 181 employees are based abroad and 1,609 in India. Of those in India, 838 are pilots and 770 are engineers; 363 of these earn over Rs 50 lakh a year, whereas six employees earn over Rs 1 crore annually.

Hold onto your seats. This is only the taxable income these employees earn. There is almost no record of their non-taxable earnings. The airline’s total wage bill is about Rs 3,600 crore a year. It has 125 aircraft in operation, offering a total number of 48,000 daily seats. Jet Airways, with 107 aircraft and 12,000-odd employees, has a wage bill of about Rs 1,200 crore. So, not only is Air India overstaffed, it also overpays its staff.

A commander with nearly nine years’ experience in a private airline earns Rs 50-70 lakh a year, while his Air India counterpart will earn around Rs 60-80 lakh a year. This may not seem very different.

But in reality, things are pretty different. On an average, an Air India or Indian Airlines pilot will fly a lot less than a Jet Airways pilot. This is due to a crazy agreement signed between the pilots’ union and the management. It allows them to fly a lot less than what is prescribed by the Directorate General of Civil Aviation. As a result, they fly an average of 700-750 hours a year (Indian Airlines) and 550-650 hours (Air India) against 900-1,000 hours for a private airline pilot. They do up to three landings in a day (for the fourth landing, the airline has to pay them extra), while private airline pilots do up to six. A Jet Airways pilot recently told me that he flies three times as much as his friend in Air India does, and earns roughly half — both are from the same batch of school and pilot academy.

In Air India, line (regular) pilots and executive pilots are entitled to a host of complex allowances such as experience allowance, licence allowance and fixed productivity allowance. Many of these are applicable for outstation night-stops. The executive pilots are reimbursed for phone bills, car maintenance and fuel. They get a literature allowance to keep abreast with the world. In many cases, accommodation in Indian Airlines and Air India colonies in Vasant Vihar (Delhi) and Santa Cruz (Mumbai) is provided at throwaway rates to senior pilots so many rent out their own houses, and use official accommodation. Predictably, getting retired pilots to vacate has been a challenge in the past.

The pilots’ allowances move from the sublime to the ridiculous. One hilarious example is the RVSM allowance. RVSM is the reduced vertical separation minima that the International Civil Aviation Organization requires one to maintain between aircraft flying above a certain level. For some odd reason, the pilots of the erstwhile Air India are paid an allowance towards this. Can someone explain why such an allowance would be needed? Doesn’t it just make sense to keep a healthy distance to avoid mishaps? This system is unique to Nacil, the company that runs Air India; (Jet, for instance, has no such allowance). In spite of the merger, Indian Airlines pilots insist on 50 per cent over and above their normal duty rate for hub-and-spoke flights. Similarly, some pilots who no longer fly get a fixed amount for 80 hours of flying in a month.

But regular pilots are put to shame by yet another category — deputy general manager (DGM), operations. I counted 174 of them in Nacil’s annual listing, and most of them earn a taxable income of Rs 75-80 lakh a year. Some of them must be performing a really special task — invisible to the naked eye — since their annual pay is well in excess of Rs 1 crore.

In many cases, DGMs earn more than the GMs, and in some cases even more than the executive director! Age, years of experience and educational qualifications have little to do with what you draw. For example, two GMs with the same years of experience, age and degree — both are class 10 pass — earn Rs 1.18 crore and Rs 71 lakh respectively. Parity is clearly unheard of in Air India. Educational qualifications, as you may have noticed, seem pretty irrelevant too.

In the pilots’ defence, I must add that pilots’ globally earn well and are entitled to many benefits, and in the case of Air India, many of these benefits have been agreed to by previous managements. Any proposed withdrawal will naturally be resisted. It is now up to the new management to do it as painlessly as possible.


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