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BW Businessworld

What On Air Is Going On?

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First, all the private airlines got together and threatened to strike on 16 August, a bizarre, empty and naïve threat. It would have been more meaningful — and fun to watch — if the civil aviation ministry had called their bluff and allowed them to proceed with it. It would have been interesting to see how many of the airlines could take the losses caused by keeping their entire fleet on the ground day after day while paying lease rentals, salaries and all other costs. Who would have been the last man standing?

Now, the newly formed National Aviator's Guild — Jet's Indian pilots' new union — has served a notice to the management, threatening to go on strike from 7 September. The Jet management, which had so far been refusing to recognise the guild — and insisting that it will only deal with the Society for Welfare of Indian Pilots (SWIP), an old society within Jet that represents the pilots' interests — has now been forced to take note and is springing into action to prevent them from carrying out their threat.

To add to the confusion, Air India's (AI) executive pilots have formed a new association — the Executive Pilots Association — two weeks ago. Along with God knows how many other unions, there are already two unions of pilots in the airline — the Indian Commercial Pilots Association (ICPA) and the Indian Pilots' Guild (IPG), the former a fairly strong body and the latter a watered down version of the old IPG, which had been derecognised and was re-recognised in 2007.

AI's employees, meanwhile, have also gone on some kind of hunger strike at airports to protest against delay in their salaries (a rather delayed reaction since salaries were not paid on time in July!), if newspaper reports are to be believed.

So, where is the sense in all this? What precisely is going on? Why are different people in the industry all of a sudden threatening to go on strike or forming unions? The answer to this is quite simple. Here is an industry that has by its own actions, and in some cases mismanagement, landed itself in a holy mess. As pressure mounts to survive in today's tighter-than-even-before environment, everyone is feeling the pinch.

Jet's pilots have used the excuse of the knee-jerk termination of two of their senior commanders. The two pilots had been fired because they were seen as the instigators in the formation of the union. The management picked two out of a committee of eight and terminated their contracts without any reason. Loyalty to these two prompted the Jet pilots to threaten strike — a threat the management feels will not be carried out. But at the heart of the discord is a deeper problem. One, the pilots are upset that the airline continues to employ many expat pilots, who earn far higher salaries. They say the expats occupying seats on the right side of the cockpit has led to a situation where they continue to fly the smaller birds and that hurts their career progression. Two, they sense that what they earn today could be hit substantially as the company effects more cuts, a move they will naturally resist as long as possible.

Then, AI's executive pilots seemed to have figured out that no matter what they do, their salary packages are going to be hit. Arvind Jadhav, the new CMD, has made it very clear that one of the first things he wants to axe is productivity-linked incentives that cost Rs 1,500 crore a year. He has gone on record to say that AI's pilots are way too highly paid, due to bizarre agreements signed between previous managements and unions. The joke in AI is that if God comes down to earth and picks a job, he'd choose to be an AI pilot. It is near impossible to figure out whether there is merit in this joke, since one has to practically do a PhD to understand the complex structure that governs a pilot's salary in that airline (if I do manage, I promise a column on it to explain it in plain language!).

As far as the industry is concerned, today its favourite whipping boy is the higher price they pay (compared to their counterparts overseas) for aviation turbine fuel. Tomorrow, it will be the higher airport charges they are forced to pay due to privatisation. Day after, it will be something else. The industry's situation will not change if any of these or even all their bugbears are tackled. A lot of it is their own creation. So, they really have no one to blame but themselves.

What does the travelling public do in this situation where different constituents of the sector threaten to do something new every day? I would say, ignore the turbulence and watch the fun. Given the shape the industry is in, I doubt anyone is going to carry out these threats in earnest. They will only make fools of themselves in public and provide us with some entertainment.
anjulibhargava at gmail dot com

(This story was published in Businessworld Issue Dated 07-09-2009)