Stop paying PLI or no further equity infusion, Centre tells Air India

The government-appointed oversight committee monitoring the implementation of Air India?s Turnaround Plan (TAP) has warned the national carrier that if it continues to pay Performance-Linked Incentive (PLI) to its employees, the government will stop further equity infusion into the ailing carrier. The government has committed Rs 30,000 crore, to be paid in tranches till 2020, to keep the debt-laden carrier flying, as per a HT report by Tushar Srivastava. ?Equity infusion is tied to milestones achieved by the airline. The foremost condition of the TAP, approved by the Cabinet, was freezing of PLI till the airline turns profitable. This hasn?t happened till now,? a senior government official said.

The oversight committee met last week. ?RS Gujral, Secretary, Expenditure, chaired the meeting,? a source said. A senior AI official said they were hopeful of convincing the panel to release the next tranche of equity when it meets next. ?The Justice Dharmadhikari Committee that was formed to sort out integration issues in Air India had recommended that the company should continue paying PLI,? the official argued.

The Civil Aviation Ministry officials said the Cabinet?s decision was sacrosanct. ?It was the Cabinet that cleared equity infusion. It had set certain conditions for release of money and stopping PLI was foremost. The Dharmadhikari panel only made recommendations. They are not binding on the government,? said an official.

Source: http://www.travelbizmonitor.com/stop-paying-pli-or-no-further-equity-infusion-centre-tells-air-india-17535

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