Air India appeases unions to avert strike action

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National carrier Air India has avoided a strike by agreeing to bring forward a wage payment to 3 July from 15 July.

On 16 June an Air India spokesman told ATI the company would delay $70 million in pay for two weeks to 15 July from 1 July, citing a challenging economic environment.The move would have affected 31,500 employees.

A threatened strike on 1 July, however, has apparently caused Air India management to bring the delayed wages forward to 3 July.

"The management has told us that we would get our salaries on 3 July," JB Kadian, general secretary of the Air Corp Employees' Union reportedly told The Times of India.

"They have also assured us there will be no wage cuts."

ATI confirmed last week that the Indian government has agreed to bail out the national carrier, which posted an $800 million loss for the year ended 31 March and appealed to the state to save it from going under.

The amount that will be disbursed has yet to be confirmed and will depend on how the state-owned airline plans to restructure its business to stem future losses, said a spokeswoman for Indian civil aviation minister Praful Patel. Air India has said that it wants $820 million in the form of equity and soft loans from the government.

After a meeting with Indian prime minister, Manmohan Singh, Patel told reporters the airline must submit a cost-cutting plan to a cabinet-level panel within a month, spelling out how it plans to reduce labour costs, cut capacity, and streamline aircraft maintenance and ground-handling services.

There will not be an open cheque book and Air India should become profitable within two years, he added. "It will be difficult for the government to keep continuing our support unconditionally," he says.