Indian Airlines' HR Problems

In 1998, IA tried to persuade employees to cut down on PLI and overtime to help the airline weather a difficult period; however there efforts failed. Though IA incurred losses during 1995-96 and 1996-97 and made only marginal profits during 1997-98 and 1998-99, heavy payments were made on account of PLI. A net loss of Rs 641.8 mn was registered during the period 1995-99. PLI payments alone amounted to Rs 6.66 bn, during the same period. According to unofficial reports, arrears to be paid to employees on account of PLI touched nearly Rs 7 bn by 1999.

Over the years, the number of employees at IA increased steadily. IA had the maximum number of employees per aircraft compared to any other airline in the world. (Refer Table III). It was reported that in 1996 the airline's monthly wage bill was as high as of Rs 680 mn, which doubled in the next three years (1996-99). There were 150 employees earning above Rs 0.3 mn per annum in 1994-95 and the number increased to 2,109 by 1997-98. The Brar committee attributed this abnormal increase in staff costs to inefficient manpower planning, unproductive deployment of manpower and unwarranted increase in salaries and wages of the employees.