Air India has begun an exercise to cut salary packages handed to its foreign pilots. It expects a large number of pilots not to accept lower remunerations, and thus leave.

The exercise will help the carrier meet a requirement, imposed by the directorate- general of civil aviation (DGCA) on all domestic airlines, to phase out all foreign pilots by July 31 next year.

“We have to phase out expatriate pilots by next year. The renegotiation will help us follow the DGCA norm and save operational costs as well,” Arvind Jadhav, Air India chairman, told Financial Chronicle.

The negotiations are not directly with the pilots but with 16 recruitment agencies, such as Rishworth and Next Generation, that have placed foreign pilots with the carrier.

Jadhav said he had asked the carrier’s operations director to prepare a formal proposal for renegotiations with the recruitment agencies. “They are working on it and accordingly sending letters to them.” The move, he added, was mainly to prepare the airline for a phase-out of expatriate pilots by the DGCA set deadline.

The foreign pilots, numbering about 250, only operate flights on international routes and those of Alliance Air and Air India Express. They do not handle domestic flights of what was Indian Airlines before it was combined with Air India. They get paid about $13,500 a month, besides perks.

The recruitment agencies admit that the renegotiation will lead to a mass exit of foreign pilots. “The renegotiation means that salaries will come down, which many foreign pilots are not willing to accept,” said one of the recruiters.

All domestic airlines are required to keep DGCA informed of their plans for the phase-out.