Air India Is Facing Unprecedented Financial Crisis – Aviation Minister


Civil Aviation Minister Hardeep Puri has called Air India’s leave without pay (LWP) scheme a “win-win for employees and management”, and acknowledged that Air India has not laid off a single employee whilst international and domestic carriers have resorted to cost-cutting through layoffs.

In a letter to Rajya Sabha MP Binoy Viswam, Puri provided clarification on Air India’s financial condition and the LWP scheme.

“Air India is also facing a really challenging financial situation,” Puri said adding the airline has taken recourse to many initiatives with a view to making sure the continuance of its operations.

Air India and its subsidiaries have paid the salary of June 2020 to its employees. He said that the airline industry worldwide is facing an unprecedented financial crisis because of Covid-19.


Puri said the LWP scheme enables employees to take a break from their office responsibilities for a defined period of time with the approval of the Air India management while retaining their employment with the company.

The scheme also provides the chance for employees to take up alternative employment during the period of the leave with the approval of the management, he said.

“The LWP is a win-win situation for both the management and the employees because it provides flexibility to employees and simultaneously reduces the wage bill of the company,” Puri said.

“The Covid-19 outbreak has very seriously impacted the airline sector and currently the airline operations of the company have taken a significant hit,” he said.


Puri added that worldwide, a number of employees are paid off because of the crisis and even other domestic carriers in India have resorted to cost-cutting through layoffs.

“But Air India has not laid off a single employee,” Puri asserted within the letter.

He explained that in the past also, Air India had begun with an LWP policy, and at this point, the only difference is that the CMD of the company can pass an order requiring the staff to travel on leave.

A proper procedure has been introduced for sparing use of this provision and it’ll be done in a good and transparent manner, Puri said.


“In view of the critical financial situation of the company which has been affected badly by the pandemic and a felt need the rationalization of salaries of pilots, cabin crew, engineers and officials of Air India and its subsidiaries are carried out,” Puri said.

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