Praful Patel, union minister for civil aviation, will meet the top management of National

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Aviation Company of India (NACIL) that runs Air India and Indian Airlines on Wednesday. Along with ministry officials, he will review the progress of cost-cutting measures undertaken by the national carrier.

According to a senior NACIL official, the cut in productivity-linked incentive (PLI) will top the agenda during the meeting.

NACIL’s executive director and corporate communications head Jitender Bhargava confirmed the meeting with the aviation minister at NACIL headquarters in Mumbai.

“The minister will be holding meeting with M Madhavan Nambiar, secretary, ministry of civil aviation, financial advisor to the ministry E K Bharat Bhushan, Arvind Jadhav, chairman and managing director of NACIL, and joint secretary P S Sukul. The minister is also expected to meet union leaders of NACIL,” he said.

Due to the model code of conduct in place for assembly elections in Maharashtra, Haryana and Arunachal Pradesh, Patel had stayed away from making any statement on the five-day mass sick leave by Air India executive pilots protesting cuts in the PLI. But, he gave a free hand to the airlines’ management to take action against the pilots, said senior NACIL officials.

Patel is expected to discuss the issue of a 50 per cent cut in PLI for A-I executives on which status quo is maintained, and give finishing touches to the proposal of equity infusion that would be sent to the central government, NACIL officials said.

The official further said that a decision on the appointment of a company, of the two short-listed, which would be involved in integrating software of Air India and Indian Airlines, is also likely to be taken at the meeting.

NACIL, which employs more than 31,000 people, plans to halve its payroll expenses from around Rs 1,500 crore through PLI cut across the board. According to a plan submitted by the restructuring committee to the central government, the public sector airline plans to reduce costs by over Rs 5,400 crore per year by savings from fuel, staff cost, hiring, parking, landing charges and ground handling, among others. It plans to increase revenues by Rs 2,400 crore per year through cargo, engineering, training and passenger revenue.

According to a recent statement made by the minister in the parliament, NACIL posted a loss of Rs 2,226 crore in 2007-08, and during 2008-09, the expected loss is pegged approximately at Rs 5,000 crore and the losses are expected to go up further this financial year. A NACIL official said that the company is expected to register similar losses in 2009-10 -- of around Rs 5,000 crore.