Air India cuts monthly allowances of employees by up to 50%

The basic salary and allowances, such as industrial dearness allowance (IDA) and house-rent allowance (HRA) will remain the same.


In an internal order released on July nation 21, national carrier Air India has announced the reduction in monthly allowances of its employees by up to 50 per cent, for those who have a monthly gross salary of more than Rs 25,000.

The order also stated that the basic salary and allowances, such as industrial dearness allowance (IDA) and house-rent allowance (HRA) will see no changes.

However, for the general category officers, all other allowances – except the aforementioned ones – will be reduced by 50 per cent.

For the cabin crew, the allowances which include check allowance, flying allowance and quick return allowance will be reduced by 20 per cent.

It is no surprise that the aviation sector is by far the most affected due to the travel restrictions imposed in India and other countries, in view of the coronavirus pandemic.

All airlines in India have resorted to cost-cutting measures such as pay cuts, leave without pay (LWP) and downsizing in order to conserve cash.

For pilots, the 11 types of allowances that include flying allowance, special pay, widebody allowance, domestic layover allowance and executive flying allowance will be decreased by 40 per cent.

As per the order, a pilot will receive the flying allowance based on his flying hours in a month.

As a special case, all pilots available for flying will receive a fixed payment of 20 hours of flying allowance or actuals, whichever is greater, every month, in the first and second quarter of 2020-21 as per flying allowance rate.

Employees, both permanent and fixed term, with gross salary up to Rs 25,000 are excluded from the reduction in allowances.

Currently, Air India has a debt of around Rs 70,000 crore and the Government had already started the process of selling it to a private entity earlier this year.

In a turn of events, on July 14, the airline sent several employees on compulsory LWP for up to five years, and also offered others an opportunity to voluntarily opt for LWP.

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