Air India has taken another step towards reducing its costs by cutting incentive payments to management-level employees.

The cut applies to the carrier's "productivity-linked incentives" paid to employees, says Air India. It expects 7,000 employees to be affected.

"The cut, applicable to all officers, including top management personnel, in various management disciplines, will range from 25% for those getting PLI of 10,000 Indian rupees ($208) or less per month, and 50% for those receiving PLI or flying related allowances of 200,000 Indian rupees or more per month."

Employees with PLIs between 10,000 and 200,000 Indian rupees are subject to a graduated scale of payment cuts.

Air India made a loss of around 50 billion Indian rupees for the year to 31 March. It has been losing money for years, and has asked the government for an equity infusion of 12.31 billion Indian rupees and a soft loan of 27.5 billion Indian rupees that will be repaid over 15 years.

The government, in turn, has asked it to come up with a cost-cutting and restructuring programme that will help it to return to profitability.

Source: Air Transport Intelligence news