Mumbai: India’s struggling local airlines plan to share details of salaries across levels and functions in an effort to moderate salaries. Partly driven by a boom in the aviation business in the country—and the consequent shortage of manpower—salaries, especially of pilots and engineers, have tripled in the past three years.
Rising wage costs and intense competition have wreaked havoc with the profitability of all airlines; Indian carriers ended 2006-07 with losses of around Rs2,000 crore. A captain (a senior pilot) earns anything between Rs4.5 lakh and Rs5 lakh a month as compared with Rs1.5-2 lakh a month three years ago.
“We have to be competitive in the domestic and international markets. Collecting salaries information is an international practice. This will help us to get an overall picture of wage levels prevailing in other airlines,” said V.A. Ferreira, executive director (human resources development), National Aviation Co. of India Ltd, which runs Air India (the new name for the merged Air India and Indian Airlines).
Collecting and sharing such information is accepted practice in other industries, especially those such as software services which employ a large number of people and witness high attrition rates.
The information helps companies rationalize their wage costs and benchmark themselves, in terms of salaries, with the competition. In some cases, consulting firms prepare reports on compensation levels in various industries and sell them to companies. An executive at Mercer Consulting (India) Pvt. Ltd said that the company helped “its clients by giving information on salaries through various surveys”.
“Collation of remuneration data will not do any harm to employees. On the contrary, it will help the aviation industry to keep rising costs under control,” said Ajay Singh, director, SpiceJet, a low-fare carrier based in New Delhi.
He added that things had been getting better ever since the government recently said pilots would have to give their airline “six months’ notice before joining another airline”.
The gap between demand and supply usually prevents firms that share information on remuneration from taking a ‘cartel’ approach to salaries.
The airlines are currently collating details of salaries of pilots, cabin crew, flight dispatchers and engineers; this information will go into a database that is being created under the aegis of the Federation of Indian Airlines, or FIA, an industry association.
The move was not targeted at reducing salaries, said a private airline executive who did not wish either his name or that of his airline to be identified. Salaries and jobs are related to the “demand-supply situation,” he added. “Airlines are not sharing remuneration details of a particular employee. We are sharing the salaries paid to various cadres to assess (the) industry average,” he said. The executive also said that the initiative to share data on salaries had got the HR heads of various local carriers talking to each other, something that was inconceivable in the past.
A person familiar with such issues said the availability of industry wide compensation data would prevent placement agencies from playing off one airline against another, and also put an end to the practice of employees claiming that a rival airline has offered them more money than they currently earn.
Still, the gap between demand and supply of airline employees in the country is set to get worse.
According to the Centre for Asia Pacific Aviation (Capa), a consulting firm, airlines in the Asia-Pacific region and West Asia will need 150,000 more employees to support the new aircraft they have ordered. “China, India, and other countries in Asia and” West Asia will be “most seriously affected,” Capa said.
Airlines in the region have ordered about 2,000 aircraft that will be supplied over the next five years.