National carrier Air India, which posted an operating profit for the first time in a decade in the last fiscal, has decided to give a 2 per cent salary hike to its permanent employees.
This is the first time in nearly five years that Air India will hike salaries. The airlines turned operationally profitable in the last financial year.
Aided by lower fuel costs and rise in passenger numbers, Air India posted an operational profit of Rs 105 crore in the last financial year. It was also the first time in a decade that the carrier turned operationally profitable.
In a communication to employees today, Air India's Executive Director A Jayachandran said in view of last fiscal's operating profit, "it has been decided that yearly increment rate for all categories of permanent employees of Air India and its employees posted in subsidiaries will be applicable at 2 per cent".
This would be be applicable only for the financial year 2016-17 -- effective from April 1, 2016 to March 31, 2017 -- and shall be payable as per the increment date of the respective employees, it said.
It is also for the first time in nearly five years that the carrier is giving a hike in salaries. The airline has around 19,000 permanent employees.
Air India, which is staying afloat on a ten-year long bailout package worth over Rs 30,000 crore, posted an operating profit of Rs 105 crore in the last fiscal. This was the first time in a decade that the embattled carrier turned operationally profitable.
However, in the first two quarters of the current financial year (2016-17), the airline reported operational losses, raising concerns about its financial stability.
Its cumulative losses stood at over Rs 700 crore for the six months ended September 2016.
The Rs 30,231 crore bailout package was extended by the previous UPA government in 2012 apart from equity support for payment of principal/interest of the non-convertible debentures. Air India's total borrowings stood at Rs 46,570,35 crore as on September 30, 2016.
(With PTI inputs)
