According to a source involved in writing the report, incentives for the 28,500-odd staff, would now be linked to the airline’s profitability. “If the airline makes profit, employees get these allowances,” said the source. These will be different from the productivity-linked incentives, which are linked to the traffic carried, and presently make up almost 80 per cent of a pilot’s total pay package. The panel called for doing away with the PLI, which it said, can be factored in while redrawing the new basic pay structure. It also sought to restrict the number of free tickets employees and their extended families are eligible for on Air India as well as partner global airlines.

In an attempt to end the turf war between the two state-owned carriers which were merged in 2007, the report advocated a cadre-based graded system for the merged entity, Air India. As career progression, it has recommended erstwhile Indian Airlines pilots to be allowed to train on bigger aircraft flown on the long-haul international sector. Air India pilots had recently threatened to strike when management approved training program for Indian Airlines pilots on much-awaited Boeing’s Dreamliners. The recommendations, if accepted by the government, will be effective from April 1, 2007.

“The report is a bitter pill,” said the source, adding, “Nobody can satisfy every segment. But they have to understand it’s the matter of airline’s survival. Some sacrifices have to be made,” said the source. While the overall recommendations of the report remain cost neutral, which means the beleaguered airline will not have to incur any additional outgo on account of HR costs, the segment which will be impacted the most will be the pilots. “Remaining 90 per cent will be getting the same salary or in certain cases even more,” said a source. Employees’ salaries will be aligned with the Department of Public Enterprises (DPE) guidelines. Allowances have been capped at 50 per cent of basic, and in case of pilots, flying allowances provision has been retained. This means all sundry allowances unique to Air India including entertainment and laundry would be abolished.

Set up in March 2011, the committee headed by retired Supreme Court Justice DN Dharmadhikari, submitted its report to the civil aviation minister Ajit Singh on Tuesday in presence of civil aviation secretary Nasim Zaidi and Air India CMD Rohit Nandan. “The government will examine the report, in consultation with the Air India management to ascertain if the company is in a position to pay as recommended,” said a ministry official.