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NEW DELHI (Reuters) - A section of pilots at national carrier Air India , who were on a 58-day strike demanding exclusive rights to fly Boeing Dreamliners, called off their agitation late on Tuesday bowing to pressure from the government and a Delhi court intervention. About 500 Air India pilots who fly international routes have been demanding their colleagues from former state-owned partner Indian Airlines should not be trained to fly Dreamliners, as it may hurt the career prospects of the original Air India staff. The strike has forced Air India to cut back on its international schedule and combine flights, which further strengthened market leader Jet Airways' hold on international routes.
Air India's purchase of Dreamliners was also criticized by a federal auditor last year for "imposing an undue long-term financial burden". and asked Air India's management to look into their demands. Indian aviation minister Ajit Singh has said the strike is illegal and the government will not get into any discussion with the pilots until they report back to work. Air India had previously said they would consider taking back the sacked staff on a case-by-case basis once the protesting pilots unconditionally report back to work. (Reporting by Anurag Kotoky. mostly in human resource-related issues.Air India has sacked more than 100 of the striking pilots. Editing by Prateek Chatterjee) . The Delhi High Court on Tuesday also ordered the pilots to join back work immediately. Air India and Indian Airlines were merged in 2007 but there have been problems with integration.
According to experts. AI employees have organised six strikes-three by pilots and the rest by disgruntled ground staff demanding salary payment.000 and with 122 aircraft in its fleet.000. the balance will migrate to the ground handling arm called Air India Transport Services Ltd. PLI will now be scrapped as no lossmaking public sector undertaking allows such incentives. bargaining power. Pilots affiliated to the Indian Pilots Guild (IPG-Air India) who are on strike for 30 days are unhappy as the report allegedly favours Indian Commercial Pilots Association (ICPA-Indian Airlines) in pay and career progression. which constitute a major portion of the pay package.000 employees will be moved to the engineering subsidiary called Air India Engineering Services Ltd. ALSO READ: Is it time for Air India to shut shop? Employees of Air India get productivity-linked incentives (PLI). Capa has advocated that AI should be placed under . While 7. The ground staff are also peeved that their allowances would be drastically cut. former executive director.000 from 27." said Jitender Bharghava. the government should immediately start an aggressive plan to offer voluntary retirement scheme (VRS) to reduce the workforce and contain the unrest by offering an attractive package. now that a partial lockout is apprehended due to the chain of strikes. perks and job security. "The government's decision on the VRS will be a laudable step if the motive is to ensure that Air India does not expand or maintain its present level of operation. the employee per aircraft ratio will come down to 82 from 221. "There is nobody taking ownership of the turnaround of AI.The government's resolve to implement the Justice Dharmadhikari Committee's report on human resource (HR) integration in Air India is fuelling unrest in the carrier's unions. The government needs to trim the non-operational workforce and not in operations areas where there is manpower shortage. AI's turnaround plan has become a casualty. will reduce the number of employees to 16. This would bring down AI's employee strength to 10. This issue is going to snowball into a big crisis and aviation consultancy firm Centre for Asia Pacific Aviation (Capa) has predicted that the Maharaja could face a temporary shutdown due to massive HR issues. The much delayed demerger proposal of strategic business units-engineering and ground handling-if immediately implemented. For the last two years. AI. But employees do not want to be shifted to these subsidiaries as they would lose their identity. Since 2009.
Capa. South Asia. Courtesy: Mail Today . chief executive.special administration similar to that adopted for Satyam if any meaningful progress is to be achieved." said Kapil Kaul.
After putting forth an original list of 14 demands. Nearly five of 11 fasting pilots have been hospitalised. Civil Aviation Minister Ajit Singh said earlier: "Sacked pilots will be taken back on a case-by-case basis. The striking pilots have started an indefinite hunger strike since June 24. protesting the move to provide Boeing-787 Dreamliner training to pilots from the erstwhile Indian Airlines. the aviators are now asking for reinstatement of their 101 sacked colleagues. stranding thousands set to fly to East Asia and the Middle East. Officials at Airlines House. But for this to happen. The strike has crippled Air India's international operations. The 1974 strike lasted for well over 90 days. had also struck work in 1974 against cost cutting measures when fuel prices shot up alarmingly. Grounded fleet of Boeing 777s.610 crore. are confident of resolving the situation by hiring new pilots. to attain the notorious distinction of becoming the second longest strike in the country's aviation history. Before the 1993-94 strike. the distinction of the second longest strike was held by AI's sister organisation Indian Airlines. The airline has maintained that pilots must first end their strike and the sacked pilots will be reinstated on a case-by-case basis.AIR INDIA STRIKE IS 2ND LARGEST STRIKE IN AVIATION INDUSTRY New Delhi: The strike by a section of Air India pilots will Monday enter the 57th day. Air India's New Delhi-based headquarters. The Indian Pilots Guild (IPG). whose pilots went on a five-week stir in 1991-92 demanding more wages. unused manpower and absence from key routes have hit the airlines' chances of a financial turnaround. . In 1993-94. the union of Air India pilots." The airline has suffered estimated revenue losses of more than Rs. they must end the illegal strike. a strike by Air India flight engineers lasted for 56 days. The current strike started May 8 when pilot members of IPG went on mass sick leave. The current strike is the longest since Air India and Indian Airlines merged in 2007.
The longest was by ICPA which lasted 10 days (April 27 to May 6. Besides revenue and reputation loss. Though there is no exact figure on how much the airline has lost since 2007 due to strikes. "Each strike inspires other industrial actions. strikes also provide opportunities to other employee unions to add pressure to get their demands fulfilled. loss of routes and unused contractual obligations have to be factored in. a blame game is on between Air India and Indian Airlines cadres." he said. as factors like ticket cancellations. he added. A stir by one union will prompt the members of other unions to force their leadership to get them a sweet deal as well. 2011) to demand pay parity." an Air India official said.There have been five major strikes since the merger. IANS . "Estimated revenue losses depend upon the nature of strike. a stir by cabin crew may not be as potent as that of pilots. According to him.
are not on strike but agitating. it has not worked. If Avhad & Co's intention was to trouble the government. who have called in sick since May 8. Members of the Indian Pilots' Guild. appears to be a man who chooses his words carefully.Air India's last shot at survival: Will the government be able to save the Maharaja? Binoy Prabhakar. the Maharashtra legislator has told reporters and in television interviews. Agitate could mean making (someone) troubled or nervous. 03. the leader of AWOL Air India pilots. ET Bureau May 20. 2012. Agitate could also refer to a campaign to arouse public concern about an issue in the hope of prompting action. .53AM IST Tags: Sunday ET| Ravinder H Dholakia| Pilots| Maharajah| India| AWOL| Ajit Singh| Air India Jitendra Avhad.
IPG members belong to the erstwhile Air India and ICPA represents the Indian Airlines pilots before the two airlines were merged in 2007. the government is actually defiant. Civil aviation minister Ajit Singh has said the government was giving the national airline. the public and the government will have to overlook a few things.Far from troubled. That brings us to the campaign part. Second would be the validity of the IPG demand that its counterparts from the Indian Commercial Pilots' Association be barred from training in the 787 Boeing Dreamliners the carrier is buying.000-crore bailout. well. which has been surviving on taxpayers' money. agitating. . Assuming arousing public concern and prompting action are the reasons the pilots are striking. one last chance to perform to qualify for a Rs 30. fraud and abuse of perks in Air India. Pampered Lot? First would be Singh's statement on Wednesday that the management is investigating cases of theft.
says the strike is most unfortunate because things were beginning to look up for the airline. Rohit Nandan. "The Dreamliners are also finally poised to join the fleet. the fight for unpaid salaries . according to a government official. if these pilots fail to become commanders by a quirk of fate or by virtue of being bad pilots.The IPG is harking back to an agreement in 2006 that said the first 12 Dreamliners be manned by Air India pilots in order of seniority. according to Ravinder H Dholakia. The Air India agitation is not a struggle by lowly paid employees demanding better wages and fighting inhuman work conditions. Third would be the salaries of pilots. a member of the Justice DM Dharmadhikari Committee.000 crore) was pushed through and the bailout package approved. University of Pennsylvania. More than the monetary losses (see At a Loss). Nandan affects a look that says as much. "The strike is a huge setback to all my efforts to revive the airline. And finally. assistant professor of management at the Wharton School. which will help reduce operational costs and optimise capacity on routes.threatens to be unheard. . a debt restructuring plan (Air India has a total debt of around Rs 44. says there is no justification for the strike especially when the Dharmadhikari Committee report is with the government. Experts and independent observers have criticised the strike for the same reason. but more importantly. Air India commanders (pilots with eight years of experience who are responsible for operation and safety during flights) receive around Rs 8-10 lakh a month (see Different Pay Scales). the carrier's year-on-year revenue and load factor (measure of occupancy) performance had markedly improved. He says last month. he says it's the further loss of confidence among consumers and time to recover market share that worries him. appointed by the government to resolve HR issues between employees of the two airlines." Good Work Undone At Air India's Delhi office." Saikat Chaudhuri. "The pilots should have waited for the implementation of the report. Air India could have benefited even more from Kingfisher's [Airlines] current woes." he says. Say. The merger obviously matters little to IPG.the only demand of the pilots that makes the 'genuine' list . chairman and managing director of Air India. That makes them among the highest-paid pilots in the world. which has said it will soon implement its recommendations. they will be compensated 'notionally' with the same pay and allowances as commanders. Due to these reasons. Dholakia says the strike is untimely and premature.
Already.the merger of Air India and Indian Airlines to form National Aviation Co of India Ltd. which was eventually renamed Air India Ltd.6% in April. it appeared logical to come together. Nandan supports the merger. Only GoAir and Kingfisher Airlines have a smaller market share. "In 2007." Fuel was being bought separately and tickets for the same destinations were sold at different counters. Air India also had the highest flight cancellations among all Indian airlines. which will rise after this month's strike. the attention has shifted from the airline's other vexing problems such as accumulated losses of around Rs 20.000 crore and its less-than satisfactory operations to the genesis of the strike . Thanks to the strike. however. according to government data. according to him. Air India's market share has fallen to 17. .
capitalise on economies of scale and scope in fleet utilisation and ground facilities. The notable exception happens to be HR. was huge. who studies and teaches mergers. President of Airline/Aircraft Projects Inc. training schedules. the areas that require particular attention and care are the fusion of different sets of capabilities and disparate cultures. The merger was due to be completed by 2009. but remained half-baked even in early 2010. was expected to result in savings up to Rs 1.. working hours. career progression and leaves. rooted in functional processes as well as people. This disparity has caused great heartburn among employees ..200 crore from 2010." Indeed. Today." Half-Baked Merger Chaudhuri could not have been more prescient. he wrote in The Economic Times in 2007. he says. it is only because it has long remained on paper.the pilot strike is a telling example of their animosity. advised by consulting company Accenture's Indian offshoot. A well-implemented merger would catalyse growth efforts as well as provide revenue and cost synergies. Chaudhuri wrote in 2007. acquisitions and innovation management. backs this argument. It is another matter that the carrier is neck deep in debt and losses. operation and IT integration is complete. a New York-based air transport consultancy. and increase bargaining power in purchasing activities as well as airport slot negotiation. there are many who see the bright side of a marriage between airlines for these very factors. If the merger hasn't spawned the promised benefits.. ".2 billion in net annual synergies and around $300 million in cost savings by 2013. a large part of the technical. In Air India's case. says pilots are acting as if they are each other's mortal enemy . remove duplications in back-end operations. Chaudhuri. expand geographic coverage. it was estimated that the carriers together would generate up to $1. the integration promises to be particularly complex. A galling example was the poor backend reservation system on the airline's website. Pilots and other employees of the former Air India and Indian Airlines function separately. Accenture declined to comment for this story. according to Nandan. according to Air India officials and experts. When US-based United Airlines and Continental announced a merger in late 2010. from bulk discounts to an end to customer confusion to insurance savings. "These include the ability to optimise networks and reduce overcapacity. HR issues remain unresolved five years after melding the two airlines.. the merger. The success of the deal will hinge on the effectiveness of the integration of the organisations.The potential for benefits. Craig Jenks. They have different wage structures.
facilities and pay remained.Nandan says much work on HR integration was done until 2009. according to a study commissioned by the government that was reviewed by ET on Sunday (Burning Rs 57 crore a Day." The result was that the differences in culture. including division of responsibilities among personnel. May 8. Previous attempts to rationalise wages were resisted. The aviation ministry appointed the Dharmadhikari panel in February 2011 soon after the study. "It was probably because no one wanted to rock the boat. 2011) because salaries in a "large number of categories are over and above the market structure". But between 2009 and 2011. Nandan says the strike is an expression of all the prejudices against the merger. the entire process came to a standstill. . according to him.
by staff at two ex-monopolies. "They were leaders. Qatar Airlines. "One cannot wish away competition. But a merger where pilot issues are sabotaging operations five years on has not happened elsewhere." Nandan agrees that the pre-merger monopoly mindset exists within Air India. according to Nandan.500-3. Besides loss of pay opportunities. but says after many years of co-existence of two companies. "It is also true that integration of pilot 'seniority' lists is often the single most difficult thing in an airline merger. it will take another 20 years for the merger to consummate.000 hours to fly the planes. "No doubt. not that of the airline. saying the airline should have selected candidates on merit." Air India has to live with a changing market place." To complicate matters for Air India. a former pilot and air safety consultant. he says. A former senior executive of Air India criticised the 50:50 division. he says. ego issues have taken over. Jenks says what is going on in India right now is not completely without analogy elsewhere airline mergers have always been difficult though there are also smooth mergers such as Delta's acquisition of Northwest in the US and British Airways' acquisition of BMI in the UK. Their actions lack a concept of a competitive environment. The Air India management has decided to divide the flying rights equally between the two sections of pilots unlike United. the impending arrival of Dreamliners has set off a new tug of war between pilots. But opinion is divided over the decision to split flying rights. and Singapore Airlines did not exist. 'franchise' way of making demands. A new aircraft type is often seen as the highlight of a pilot's career. says the Civil Aviation Safety Advisory Council had recommended that pilots with at least 5. there was soft-pedalling on the issue. is the determination of key parties to ignore the global way of operations." he says.000 hours of flying must fly the 787s. selecting the initial batch of pilots based largely on their length of service." What is surprising to an outsider. which chose an auction-style system. But the Air India management is allowing people with only 2. "What you have here is a monopoly. Nandan says if the seniority of all the pilots were to be accounted for. "The division implies that the interest of the employees is what matters." he says. Not to speak of Indian low-cost carriers. The hype surrounding 787s has added an extra dimension of rivalry among pilots. says Jenks. That attitude is being threatened from within and outside. "This is as if Emirates. according to Nandan. . this was inevitable.But the committee came in too late." Mohan Ranganathan.
he says.the average age of an Air India employee is 50 . and change the incentive model for employees should bode well for Air India's turnaround. according to him. "The sense of urgency that has now taken hold at the airline and all its stakeholders and the aggressive actions being taken to rationalise costs. Chaudhuri agrees. overlooking the experience part.000 people will retire. Air India is an ageing airline . The Future Despite the strike. For now. integrate the two carriers. the government appears to be sticking to its guns. 7. "No one really seems to be giving attention to the safety issues involved.because no major recruitment has taken place since 1989. "It is earned by performance against competitors in the marketplace. 'We have ensured nobody is unduly dissatisfied' . adding that 'reservations' in jobs will end and selection will be based on merit. says Jenks. Nandan remains sanguine about Air India's future. Jenks says survival is not a right." An end to the agitation might be a good beginning. Anyone who has followed the Air India crisis would know that the government's stand is quite unusual. according to him." Ranganathan says everybody is talking about the years needed to become a commander. He also remains optimistic about the strike by pilots. In the next five years." he says. in airlines or anywhere else. The mass retirement will help usher in radical changes in recruitment.At around 500. The airline was allowed to go bust. and that requires collaboration by all key stakeholders. Indian Airlines pilots have recorded five times the number of landings than Air India counterparts because they fly shorter domestic routes. Ending the strike could be the most important step in solving the merger issues. and then restructured. he says. adding that it is now performing much better. Perhaps the government can learn from the experience of Japan Airline Ltd. the 50:50 split is the best solution. "And landings matter for commanders." But given the circumstances. he says. he says. Nandan says many of Air India's problems will be resolved after the Dharmadhikari committee recommendations are implemented.
the committee has proposed that their seniority should be maintained within each type of aircraft .Binoy Prabhakar . In any case. they should be allowed after training using an auction system. Prof Dholakia says the government is unnecessarily taking time to implement the report. according to him. . says Prof Dholakia. the committee said these benefits must be linked to the leave travel concession system prevalent in other PSUs. he says.The government has accepted all the recommendations of the Justice DR Dharmadhikari Committee.wide-body and narrow-body planes. "We have ensured that nobody is unduly dissatisfied. The committee has not proposed job cuts. The four-member committee also proposed that employees must properly 'define' family because these benefits were being availed even by 'extended' family members. culture and work environment of the two airlines by taking everyone on board. On the latest pilot strike. barring a few 'harsh' ones. Regarding commanders and co-pilots. But if pilots wished to switch to another type of aircraft. The committee has left to the management to decide on which section of pilots will fly the Dreamliners. Instead. there are efforts to reduce manpower by hiving off the company into maintenance. Dholakia says the committee has tried to unify the different working hours. the committee adhered to the government's demand that its recommendations should not result in an additional wage burden. repair and operations units and ground handling units. Many employees were also found to be on the verge of retirement. Through the entire exercise. according to Ravinder H Dholakia of IIM Ahmedabad. a member of the committee set up by the government to streamline the wages of warring Air India and Indian Airlines employees. The committee did find rampant cases of duplicity of jobs and said the management should rationalise the number of posts." He says the contentious issues of seniority levels and career progress too were addressed based on the years and terms of service of executives. The harsh recommendations include a proposal to cap the current benefits enjoyed by some employees such as unlimited free flights even after retirement. according to him.
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