Mint Explainer: Why is Akasa Air taking 43 pilots to court?

The airline's flight cancellation rate last month was 1.17%, the second-highest since its launch in August 2022 (Photo: Akasa Air)
The airline's flight cancellation rate last month was 1.17%, the second-highest since its launch in August 2022 (Photo: Akasa Air)

Summary

  • India’s youngest airline is seeking 21.6 crore in compensation from 43 former pilots, claiming they left without serving the mandatory notice period

With the aggressive expansion of IndiGo and airlines under the Air India umbrella, industry experts have pointed out that India’s aviation industry faces a scarcity of senior pilots.

According to reports, more than 40 pilots left Akasa Air without serving the mandatory six-month notice period, causing the fledgling airline to cancel a large number of flights. Its flight cancellation rate last month was 1.17%, the second-highest since its launch in August 2022. This number was 0.45% in July and 0% in March. Akasa’s share of the domestic market fell to 4.2% in August from 5.2% in July.

Such situations are not unusual in an emerging aviation market like India’s. Currently, there are seven major carriers in India, of which Go First has been inactive since May. Industry experts say the Tata-backed Air India and India’s largest airline IndiGo have the strongest promoter support of the lot.

This is evident in the order book of the two airline groups, with over 1,300 aircraft on order for IndiGo and 470 aircraft in the pipeline for the Air India group. In addition, the two entities are constantly eyeing opportunities to add capacity by wet-leasing or dry-leasing older aircraft as the supply of new planes has been constrained by global supply-chain issues since the pandemic.

Low-cost carrier SpiceJet, among others, has been under financial stress thanks to multiple legal cases with lessors, its former promoter group, and Credit Suisse over the payment of dues.

An industry executive said, “Akasa is a strong player and has been able to steadily increase its market share in domestic aviation. It will be important for the airline to either expand slowly or ensure a competitive offer to retain pilot talent. Flight cancellations are the biggest dampeners for customer sentiment. They need to be avoided at any cost."

In a claim filed in the Bombay High Court against the 43 pilots, Akasa Air has sought 21.6 crore in compensation. This includes 14.28 crore for reputational loss caused by the cancellation, re-scheduling and grounding of flights, 6.96 crore for loss of operational profits, and 36 lakh on account of the pilots’ training agreement.

“We have sought legal remedy only against a small set of pilots who abandoned their duties and left without serving their mandatory contractual notice period. This was not only in violation of their contract but also the country's civil aviation regulation. Not only is this illegal in law but also an unethical and selfish act that disrupted flights in August, forcing last-minute cancellations that stranded thousands of customers and caused significant inconvenience to the traveling public," the airline said.

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