The latest crisis in Air India, India's state-owned airliner, began a week ago when striking pilots suddenly reported sick in huge numbers. The crisis has entered its eighth day Tuesday with the carrier cancelling 24 more flights even as no indication of a solution is seen on the horizon.

In the last one week, the carrier has lost over a billion rupees ($18 million) in revenue while passengers had a harrowing time with flight schedules thrown into disarray.

Air India in its current shape came into existence after the Indian Airlines (IA) and Air India (AI) merged in 2007, making it a state-owned national carrier under the Civil Aviation Ministry.

However, the merger was not smooth as employees of both airlines had issues with the management on internal administration. Since then, there has been a rift between the employees from both companies over paychecks and career progress.

Pilots who came from legacy Air India have said those who came from Indian Airlines have better promotion options. A complaint made by senior executive pilots of Air India to the government states that an Air India pilot is entitled to become a commander after ten years of flying, while an Indian Airlines pilot needs to complete just five years of flying for the same.

The Current Crisis

The current crisis started when the management decided to train pilots from erstwhile Indian Airlines on the Boeing-787 Dreamliner, along with pilots from Air India.

AI pilots objected to this move, alleging that it would give the IA pilots an undue advantage in career. However, the management went ahead with the training program and sent pilots from both AI and IA for training. AI pilots started reporting sick immediately by way of protest and, according to the management, over 250 pilots have reported sick while the Indian Pilots' Guild (IPG) which is spearheading the strike, puts the numbers of striking pilots at 400.

The Current Status

The pilots' strike, apart from upsetting travel plans of thousands of passengers and causing a loss of billions of rupees to the government carrier, has put the very future of Indian aviation industry at stake.

Both striking pilots and the government have stubbornly stood their ground and any sign of a solution seems miles away.

The pilots had expressed a desire to meet the government for talks. However, both the government and the Air India board, taking a serious note of the strike, have refused to hold any talks with the striking union. The Delhi High Court last week had termed the strike illegal but the pilots have refused to budge and are continuing with the strike.

Following the court order, the management of Air India has dismissed a total of 76 pilots over the last week for not reporting to work and has asked the DGCA to cancel the licenses of 11 office bearers, de-recognizing the striking union IPG at the same time.

Meanwhile, the Air India management has moved the Supreme Court, alleging contempt of court by the striking pilots who have refused to obey the High court order to report back to work.

Pilots' demands

Apart from the initial demands of impartial and fair internal administration and industry relations between the management and the employees, the striking pilots are now asking the management to reinstate the sacked pilots and office bearers and re-recognize IPG.

Key developments

  •  Air India has cancelled several domestic and international trips daily in the past week. It has grounded the bulk of its 17 Boeing 777 aircraft and the carrier has lost over a billion in canceled trips, grounded aircraft and unused labor.
  •  Air India has extended its bar on international bookings on long-haul routes till May 15. This would mean cancellation of nearly 16 international flights per day to the US, Europe, Hong Kong and other places.
  •  The government has asked the striking pilots to get back to work and has started verifying the fallen sick claims of the striking employees. A panel of medical experts was sent to employees' residences to verify the extent of illness of the sick employees. Reports state that many of the employees' houses were either locked up or they were not present at the time of the medical team's visit.
  •  The Directorate General of Civil Aviation (DGCA) has issued show cause notices to the 11 office bearers following the AI management's request to cancel their licenses.
  • Adding to the chaos, two Air India pilots were arrested by the Mumbai police for posting derogatory and unparliamentary comments about the Prime Minister's Office, the Supreme Court and the national flag on their social networking site, according to local media reports.
  • Air India's executive pilots have also come out in support of the striking Air India pilots, although they themselves cannot join in the strike since they are a part of the airlines' management.

Contingency Plans

Air India has announced that it will implement a contingency plan that would ensure a guaranteed operation of fixed share of international flights, if the pilots continued with their strike. This means that the carrier would ensure that flights to the US and Europe continue as per schedule.

Wet leasing: Air India is looking for wet leasing of 4 or 5 planes to operate in its long-haul trips in the international sector. In wet leasing a plane is leased with its crew and according to a Hindu Business Line report, AI has more than 13 offers for the same.

Deploying Executive Pilots: Air India has over 80 executive pilots and is thinking of using their services to operate the essential flights. These pilots are trained to fly international sectors and also handle ground level operations. Since they are part of the management, they cannot form unions or participate in the ongoing strike.

What Lies Ahead?

The continuous strike, apart from disrupting the Air India services and adding to public agony, has put the implementation of the Rs 300-billion bailout package announced by the government to rescue the ailing state carrier in doubt.

The bailout depends on the airlines' performance and meeting certain targets, and the current strike has effectively jeopardized its efforts in achieving the set targets.

According to a Business Line report, bankers have expressed concern over the viability of implementing the package as the strike has impacted the daily revenues of the carrier. Air India was earning Rs 150 million revenue from its international flights daily and after the strike its earnings have dropped by nearly 50 percent.

The Air India crisis has resulted in other private airlines taking undue advantage of the situation by raising fares indiscriminately, forcing the DGCA to come forward with a strict warning.

The De-merger Demand

The demand for the demerger of AI and IA will once again come up due to the current crisis, as many industry experts believe it is a union of two incompatible individuals. The merger, which was aimed at exploiting the strengths of both airlines, never actually took off in that direction. Instead, debts mounted and new troubles with the continuing conflict between AI and IA employees further worsened the situation. Disparity in pay scales, promotions and holidays between AI and IA employees has created a rift across all levels and cadres. The merger created problems that cannot be solved. Our grades, work, promotions and allowances are different. When you see your colleague from the other cadre doing the same work, but getting easy promotions, allowances, there is bound to be resentment, a senior official told an IANS on condition of anonymity.

Moreover, a parliamentary committee on public undertakings [COPU], which studied the merger issue said in its study report that the move was ill-conceived and erroneous and asked the government to have separate domestic and international airlines under a single holding body. Even the government has realized that the merger attempt was futile.

Obviously the merger didn't go as planned, and there is something seriously gone wrong. My job is to see what the current situation is, learn from past mistakes and work to see that Air India succeeds, Indian Civil Aviation Minister Ajit Singh said a CNN-IBN program.