A labour crisis at AI Engineering Services Ltd (AIESL), the country’s largest aircraft maintenance, repair and overhaul (MRO) company, remained unresolved as on Tuesday night despite a management climbdown after nearly two weeks of protests.
Management softened its stance after 13 days of unrest by accepting resignations from around 180 employees whose exits had sparked the protests.
However, key demands, including reinstatement of terminated employees and talks on wage revision, overtime and career progression, remain unresolved, keeping up to half of AIESL’s workforce away from maintenance duties, according to employees and a former union office-bearer Mint spoke with.
Tuesday marked the 13th day since aircraft maintenance engineers at AIESL stopped reporting to workshops and hangars. Employees have stopped short of calling it a strike. On Tuesday, protesting workers marked attendance but skipped maintenance duties, according to two employees.
An estimated 2,200-2,500 engineers across AIESL’s facilities in Delhi, Mumbai, Chennai and Bengaluru have stayed away from maintenance work amid disputes over resignations, suspensions, terminations and delayed career progression. Workers in Kolkata, Nagpur, Hyderabad and Thiruvananthapuram have also joined the protest.
AIESL and the civil aviation ministry did not respond to Mint’s queries.
Management climbdown
In the first major concession since protests began, AIESL on Tuesday accepted resignations of nearly 180 contractual engineers who had quit in February after securing jobs at private airlines and MRO firms, citing concerns over pay, overtime and career progression.
"Resignations of around 180 employees were accepted. Management also said terminated employees would be taken back. While relieving letters for resigned employees have come, taking back sacked employees has not happened," said Prashant Kumar Patel, a protesting employee and office-bearer of the employees' union that was de-recognized earlier this month. Patel has since been terminated.
Discussions around wage revision and overtime remain postponed. Employees are yet to decide their next move if terminated workers are not reinstated, according to Patel.
Flashpoint issue
AIESL management allegedly refused to approve several resignations despite employees serving their three-month notice period—informing some only days before their scheduled exits that they would not receive release letters or no-objection certificates needed to join rival employers.
Mint reviewed correspondence from AIESL's Nagpur unit in which an HR officer told an employee, days before his scheduled last working day on 19 May, that his resignation had "not been approved by the competent authority"—despite it having been submitted on 20 February.
"Four employees in the Nagpur unit were affected. …since there was no resolution, and it was a recurring issue across units, workers protested and backed affected employees," Patel said, adding that intervention by the Nagpur labour commissioner on 18 May failed to break the deadlock.
Safety concerns
The dispute widened after AIESL terminated around a dozen engineers and suspended others, many allegedly linked to the union spearheading protests, according to employees.
On Monday, chairman Amit Kumar and CEO Sharad Agarwal met protesting employees, though talks ended without resolution. By Tuesday, management had softened its stance on resignations.
The staff shortage has slowed operations and raised concerns around aircraft turnaround timelines. Air India, which accounted for 70% of AIESL's revenue in FY24, is among the affected carriers, according to two protesting employees. AIESL also services the Indian Air Force and foreign airlines including Kuwait Airways.
The unrest has reached the Prime Minister's Office, with CPI(M) raising concerns over maintenance disruptions and air safety.
“Thousands of passengers depend daily on the technical expertise and labour of these workers (FTEs) for safe flight operations,” CPI(M) general secretary M.A. Baby wrote in a letter dated 23 May, describing the situation as “an alarming development”.
Baby cited an incident on 21 May when an Air India flight from Bengaluru (AI 2802) made an emergency landing at Delhi's IGI Airport following suspicion of fire in one of its engines, and noted that the civil aviation minister had also been separately approached by MP John Brittas.
Operations intact
For now, Air India said worker unrest at its former MRO subsidiary had not affected operations. The airline said it had “proactively mobilised and strengthened” in-house engineering and maintenance capabilities and was also using third-party support to ensure continuity.
“Air India’s flights continue to operate as scheduled, in full compliance with all applicable safety standards and regulatory requirements,” a spokesperson said.
“(The protest) will not affect flight safety in any way. AIESL is a strong company with a healthy track record,” said Sanjay Lazar, aviation expert and chief executive of Pune-based Avialaz Consultants.
Debjani Aich, partner at CMS INDUSLAW, noted that under the new Labour Codes, effective 21 November 2025, fixed-term employees generally have parity on pay and working conditions with permanent employees, and that a three-month notice period is legally sound if covered by an employment agreement.
The government did not privatize AIESL along with Air India when the Tata Group acquired the airline in 2022. Instead, AIESL remained under AI Assets Holding Ltd (AIAHL), the government’s special purpose vehicle that retained Air India’s non-core assets and debt. The ministry of civil aviation oversees AIAHL and, in turn, AIESL.
AIESL's revenue rose 7% year-on-year to ₹2,180 crore in FY24, though profit fell nearly 60% to ₹258.98 crore.