Incentive cut suspended, Patel asks Air India pilots to return

Incentive cut suspended, Patel asks Air India pilots to return
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First Published: Wed, Sep 30 2009. 12 47 AM IST

Troubled times: Air India aircraft at the Mumbai airport. Chairman Arvind Jadhav says that pending productivity-linked incentive payments of the last two months would be made by early next month. Reut
Troubled times: Air India aircraft at the Mumbai airport. Chairman Arvind Jadhav says that pending productivity-linked incentive payments of the last two months would be made by early next month. Reut
Updated: Wed, Sep 30 2009. 12 47 AM IST
New Delhi/Mumbai: India’s civil aviation minister Praful Patel moved to end a strike by Air India pilots that had disrupted the national carrier’s operations for four days, suspending the cut in incentive payments that sparked the agitation and threatening action if they didn’t resume duty.
Patel asked the pilots to return to work Tuesday night, failing which the airline management had the backing of the government to take whatever steps it deemed fit.
“It’s bringing disrepute to Air India,” he said speaking publicly on the issue for the first time since the stir began on Saturday.
The minister’s statement in New Delhi was welcomed by some pilots, who said they were ready to fly based on his assurances.
“People are all happy. They are just waiting for the official communication when will we get the money. Then we are ready to fly,” said a senior pilot belonging to the Indian Commercial Pilots’ Association, ICPA, and closely associated with Capt. V.K. Bhalla, who’s been heading the strike.
Troubled times: Air India aircraft at the Mumbai airport. Chairman Arvind Jadhav says that pending productivity-linked incentive payments of the last two months would be made by early next month. Reuters.
Air India’s chairman and managing director Arvind Jadhav said pending productivity- linked incentive (PLI) payments of the last two months would be made by early next month. State-owned Air India is run by the National Aviation Co. of India Ltd.
The payment would be made on 7 October. The September salary has already been paid, the carrier said in a statement.
The airline did not clarify what steps it could take if pilots continued to report sick.
A senior government official who did not want to be named said the airline could take steps such as terminating some pilots and issuing suspension orders to others.
“I hope good sense will prevail and they will come around,” said a ministry official, who, too, did not want to be named. “There are so many ways we can take steps. But the purpose is not to ground the aircraft but make them fly. There are established guidelines including cancellations of licences. All options are on the table.”
Several pilots of the national carrier started reporting sick on 26 September, a day after the airline informed them of their incentives being reduced by as much as 50% as part of the promise made by the carrier to the government to cut costs in return for $1 billion in equity support. In the last three days, as more pilots reported sick, the airline’s revenue loss bloated to more than Rs80 crore at the peak of the festive season. The carrier was already losing Rs400 crore a month before the strike started.
Bhalla accused Air India of discrimination against domestic pilots, echoing a grouse expressed by Jet Airways (India) Ltd pilots who undertook similar action earlier this month.
“How can Air India cut our PLI when it pays a huge packet to foreign pilots. There is a pre-planned conspiracy to sabotage Air India. It is transferring the passengers to other private carriers,” Bhalla told Mint.
Other pilot unions backed the stir. “We hereby extend our full support to the executive pilots and the ICPA. We share their concerns wholeheartedly and expect the management to take corrective action to resolve the issue amicably at the earliest,” said a statement from the Indian Pilots’ Guild.
Travel agents complained that they have been unable to sell domestic or international Air India tickets. “Since today morning, the ticket reservation system for Air India flights is showing zero seats,” said Regi Philip, a travel agent who runs Cosmos Agencies in Mumbai. “Unfortunately, there are no instructions from the airline.”
On Tuesday, nine international flights out of 21 had to be cancelled as 60 executive pilots reported sick. On the domestic front, 87 executive pilots reported sick leading to 37 flights being cancelled and four flights being combined into one.
Air India flights to the US, the UK, Singapore and Germany were curtailed along with dozens of domestic cancellations. These included flights to New York from Delhi and Mumbai, to London from Delhi and Mumbai and to Chicago from Delhi, besides the Amritsar-London-Toronto and Ahmedabad-Frankfurt schedules.
“No fresh bookings until further notice,” the airline had said on Monday, a process that only happens when a lockout has been planned, said Kapil Kaul of Centre for Asia Pacific Aviation.
The airline denied talk of a lockout and said it would be operating flights with existing resources.
Air India’s chairman defended the PLI cut saying it was one of the measures among a slew of steps necessary to stay relevant and get government support. “I am not targeting only employees. It’s the most visible form of cost-cutting,” Jadhav said Tuesday, after meeting civil aviation secretary M. Madhavan Nambiar. All other savings like fuel, shutting down offices, calling back officers from foreign postings are also going hand in hand, he said. The airline has exhausted its working capital limits and was “living hand to mouth”.
Incentives for employees have gone up from Rs1,000 crore a year to Rs1,500 crore in two years and pilots and cabin crew alone make up for at least half this sum. “This is a strange paradox as everything else like load factors, yield and on-time performance have gone down,” he said.
The civil aviation secretary met all the airlines on Tuesday and asked them not to raise fares in the midst of the crisis and accommodate passengers in their flights. The Director General of Civil Aviation “asked all the airlines to be watchful on safety aspects and directed them to provide adequate facilitation to the passengers. The DGCA would carefully monitor ticket prices during this period,” the ministry said in a statement.
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First Published: Wed, Sep 30 2009. 12 47 AM IST