The country's recession-hit public sector carrier, Air India, has been taking measures to set its financial health in order and to sustain adequate growth rate in the fiscal. In a notable move, the carrier has announced 50 percent reduction in the Productivity Linked Incentive (PLI) scheme for its employees and crew members, which accounts for
30 to 70 percent of the monthly wages of staff.

The Board of the carrier, expected to suffer a loss of Rs 7,200 crore as on March 31, met in Mumbai on Thursday, deciding to issue an alternative formula for governing incentives based on employee's performance, yields, seat factors, operating margins and profitability.

A source close to the development said: "Employees salaries cannot be touched but the PLI needs to be brought in line with Government guidelines. The salaries will be paid from the money that the airlines are making."

Meanwhile, Air India employees Unions expressed stern reservations over cut in incentives, refusing to accept any reduction in PLI or allowances. Union's spokesperson said: "We are still in discussion with CMD and no conclusion has yet been arrived at."

The recession-hit carrier has also decided to cancel the delivery of six Boeing 777 aircrafts. However, the move, according to experts, may draw legal actions.