Program & Batch: Term: Course Name: Name of the faculty: Topic/ Title : Original or Revised Write-up: Group

Number:

PGDM(2012-14) V Industrial Relations and Labour Laws D.P.Sahoo AIR INDIA 2012 STRIKE
IR ISSUES

Original

Contact No. and email of Shreya Trivedi Group Coordinator: sshreya.trivedi@gmail.com Group Members: Sl. 1 2 3 4 5 6 Roll No. 12HR-022 12HR-023 12HR-026 12HR-030 12HR-031 12HR-032 Name Ramya Krishnan Rashmi Tripathy Sanya Sharma Shreya Trivedi Sweta Rani Tanubhav Tyagi

Industrial Relations & Labour Laws

AIR INDIA 2012 STRIKE

IR ISSUES
Group 3 (Collective Bargainers)

AUGUST 2013

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Contents
Executive Summary ........................................................................................................................ 4 KEY WORDS: ................................................................................................................................ 5 Aviation Industry ............................................................................................................................ 5 Market Size ................................................................................................................................. 6 List of Operational Airlines ........................................................................................................ 7 AIR INDIA ..................................................................................................................................... 9 Company Background ................................................................................................................ 9 Early Years.................................................................................................................................. 9 Subsidiaries ................................................................................................................................. 9 Air India Cargo ....................................................................................................................... 9 Air India Regional................................................................................................................... 9 Air India Express .................................................................................................................. 10 Merger with Indian Airlines...................................................................................................... 10 Financial Crisis Faced ............................................................................................................... 10 The crisis ....................................................................................................................................... 11 Union of Air India ..................................................................................................................... 11 History of IR in Air India.............................................................................................................. 12 Strikes in 2009 .......................................................................................................................... 12 Strikes in 2010 .......................................................................................................................... 12 Strikes in 2011 .......................................................................................................................... 13 Timeline of the 2012 Strike .......................................................................................................... 15 Strike in 2012 ............................................................................................................................ 15 May 7, 2012: AI pilots go on mass sick leave. AI management suspends all flights to the US, Canada and Europe. ........................................................................................................... 15 Demands by the Union.................................................................................................................. 18 Exclusive flying rights on of dreamliner .............................................................................. 18 2007 onwards payment of arrears ......................................................................................... 18 First Class travelling when not on duty ................................................................................ 18 Career Progression: ............................................................................................................... 18 Reinstatement of sacked pilots.............................................................................................. 18 3|Page

Pay parity and Pay increase .................................................................................................. 19 Re-recognize IPG .................................................................................................................. 19 Crux of the Issue ....................................................................................................................... 19 Union and Management Perspective ............................................................................................ 20 UNIONS VIEW: ....................................................................................................................... 20 1. Training and Development: .............................................................................................. 20 2. Career Progression Discussion: ........................................................................................ 21 MANAGEMENTS VIEW:...................................................................................................... 21 AIR INDIA PILOTS STRIKE ENDED AFTER 58 DAYS:.................................................... 22 Recommendations ......................................................................................................................... 24 Conclusion .................................................................................................................................... 25 Bibliography ................................................................................................................................. 27

Executive Summary
Air India is Indias flying ambassador for the world. It is the Maharaja of aviation sector of India but the flag carrier airline of India has lost its top position and slipped to the fourth place in the domestic aviation sector following the economic losses in 2012. Air India has been facing problems for some time now. It has been facing problems both on the financial front as well as from its human resources. The domestic market share of Air India declined from 19.2% to 14% between September 2007 and May 2011. They were suffering heavy losses partly due to the inefficient management by the government managers and mainly due to the heavy competition the company is facing from the private and low cost carriers. They were suffering heavy losses and needed a bailout but the financial restricting plans went southwards when the employees of Air India went on strike on May 8, 2012 in order to protest against the decision made by the management to train pilots of Air India and former Indian Airlines for the newly inducted Boeing 787 Dreamliner fleets. The strike caused them to lose the bailout package of Rs 150 crore when the company was almost bankrupt in words of Mr. Ajit Singh. The strike continued for 58 days, in spite the fact that the Delhi High Court has declared the strike as illegal. The already troubled facing airline lost and additional Rs600 crore because of the strike by the pilots. The strike was unique in the aspect that the pilots went on medical leave as their mark of protest instead of a regular strike. The 58 day strike was full of moves and counter moves both from the pilots and the management. After the pilots went on strike, Air India sacked 101 agitating pilots and de-recognized their union after those 160 pilots failed to join their duty by the given deadline and following the failure of the pilots to return to duty the government cancelled the Rs 150 4|Page

crore bailout package and the Aviation minister Ajit Singh announced that he would go ahead and hire new pilots if the strike did not end soon. The strike finally ended on 4th July, 2012 after the intervention by the High Court when the Air India management gave an assurance to the Delhi High Court that it would looks into the hardships of the pilots sympathetically and as a result the pilots decided to immediately call off the strike.

KEY WORDS:
IPG: Indian Pilots Guild Strike Merger Career Progression HR issues Union demands Management actions to settle demand Management efforts to resolve strike Settlement (collective bargaining)

Aviation Industry
Aviation Industry as an infrastructure segment has played an important role in the growth and development of the business and economy of the country. Aviation sector is not only the most important mode of transport but also a strategically important element for employment generation. About one-third trade (by value) of the world is carried by air and about half of the international tourism in the world is carried out by the air routes. The aviation industry in India has been going through a turbulent phase due to high rising oil prices and limited pricing power partly contributed by industry wide over capacity and partly by subdued growth period. As on by 20th February 2013 the total fleet size of commercial airlines in India was 371. In 1994, the Air Corporation Act of 1953 was repealed with a view to remove the monopoly of air corporations on scheduled services, enable operation of scheduled services by private airlines, convert Indian Airlines and Air India to limited companies and enable national carriers private participation. Since 1990 operating air taxi services by private airline companies was allowed, resulting in Jet Airways and Air Saharas establishment. These changes in the Indian aviation policies resulted in the increase of the share of private airline operators in domestic passenger carriage to 68.5% in 2005 from a meager 0.4% in 1991.1

(List Of Airlines Of India: Wikipedia 2013)

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Market Size

Total domestic passengers carried between January and April 2013 by the scheduled domestic airlines were 20.289 mn, revealed the official statistics. No-frill carrier IndiGo leads in terms of market share with 29.8%, followed by Jet Airways-Jet Lite combined share at 22.6%, Spice Jet 19.6%, Air India Domestic 19.2% and Go Air at 8.9% for the January-April 2013 period. The air transport (including air freight) in India has attracted foreign direct investment (FDI) worth US$ 449.26 mn from April 2000 to March 2013, as per the Department of Industrial Policy and Promotion (DIPP)s data.2

1910: The first Indian, or maybe even Asian, to have had an interest in airplanes was the young Maharaja of Patiala, Bhupinder Singh, who was keenly interested in aviation. With an order to buy three planes, he sent his Chief Engineer to Europe for a study; the three planes included a Bleriot monoplane and Farman biplanes. These planes arrived in Punjab later that year. 1911: The air transport started in India on February 18, 1911. It was on this day when Henri Piquet,usinga Humber bi-plane, carried mail from Allahabad to Naini Junction, around 6 miles away. 1932: JRD Tata launched the Indias first scheduled airline, Tata Airlines, piloted by him from Karachi to Mumbai via Ahmedabad on a single-engine. 1933: In the first year of its operation, Tata Airlines flied 160,000 miles, 10.71 tonnes of mail and carried 155 passengers. In the following years, Tata Airlines relied for its revenue on the mail contract with the Government of India for carriage of surcharged mail, which included a considerable quantity of overseas mail brought by Imperial Airways to Karachi. Tata Airlines launched in the same year its longest domestic flight: Mumbai to Trivandrum with a six-seater Miles Merlin. 1945: The second domestic Indian airline, Deccan Airways, was founded with 71% owned by the Nizam of Hyderabad and 29% stakes was owned by Tata Sons. 1946: Tata Airlines changed its name to Air India. 1953: Air India International and Indian Airlineswas set up after legislation to nationalize the entire Indian airline industry came into force.

(Indian Aviation Industry 2013)

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1960: India gets Air India B707; USA and India are connected for the first time with an Indian airline. 1989: India Airlines became one of the first airlines to induct the A320 into its fleet. 1990: East West Airlines became the 1St private airline since 1953.3

List of Operational Airlines

Airline Call Sign Commenced Operations Headquarters Status

Air India Air India Express Air India Regional Air Odisha Blue Dart Aviation Club One Air Deccan 360 Deccan Charters Deccan Shuttles GoAir IndiGo Invision Air Jagson Airlines Jet Airways Quikjet Cargo SpiceJet TajAir

AIRINDIA EXPRESS INDIA ALLIED BLUE DART

October
(as Tata Airlines)

1932

Mumbai Kochi Mumbai Bhubaneswar Chennai Mumbai Raipur Bangalore Bangalore Ahmedabad Mumbai Gurgaon Mumbai Delhi Mumbai Bangalore Chennai

National Carrier Scheduled Scheduled Non-Scheduled Cargo Non-Scheduled Non-Scheduled Cargo Non-Scheduled Non-Scheduled Scheduled Scheduled Non-Scheduled Scheduled Scheduled Cargo Scheduled Non-Scheduled

April 2005 1996

(as Alliance Air)

November 2012 1995 August 2005 2012 1997 2012 June 2004 August 2006 March 2011 November 1991 May 1993 Feb 2012 May 2005 November

Chhattisgarh Air Link DECCAN DECCAN GOAIR IFLY JAGSON JET AIRWAYS QUIKJET SPICEJET

DECCAN CARGO 2009

1993 Mumbai

(Naik 2005)

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(as Megapode)

Ventura Airconnect
4

AIRCONNECT

July 2011

Gurgaon

Non-Scheduled

(List Of Airlines Of India: Wikipedia 2013)

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AIR INDIA
Company Background
Air India is the national flag carrier of India. It is a part of Air India Limited, which is a government of India owned company, which was formed to look over the Air India and Indian merger. The merger took place on 27th February,2011. Air Indias corporate office is at Indian Airlines House, New Delhi. Air India currently ranks fourth in the Indian Domestic aviation Sector.

Early Years
Tata Group, formerly known as Tata Sons was founded by JehangirRatanjiDadabhoy (J.R.D.) Tata in 1932. J.R.D. Tata had obtained the first pilot license issued in India. 5 His friend NevillVintcent, an aviator had an idea to run mail flights from Bombay and Colombo. These were connected to flights from the United Kingdom. J.R.D. supported the idea. He founded Indias first airline which was known as Tata Airlines, the aviation department of Tata group in 1932. It was later on renamed as Air India in 1946. After Independence, the Government of India purchased a 49% stake in the airlines. 6 This granted the airlines to run international services too. This was under the name Air India International. The Government of India had put a plan in 2001 to privatize Air India. Later the plan was shelved.

Subsidiaries
Air India Cargo Initially Air India Cargo was a cargo airline. It was used for freight carrying. It has stopped operating as an airline. It is used now for cargo capacity of Air India passengers. Air India Regional Air India regional is a low cost airline. It was formed as a part of the merger of Indian and Air India. It was initially known as Alliance Air.

5 6

(J._R._D._Tata 2011) (Air_India n.d.)

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Air India Express Air India Express is a low cost subsidiary of Air India. It mainly operates for flights in Kerala and Tamil Nadu. It mainly connects to the Middle East and South East Asia.

Merger with Indian Airlines

Up until 2007, Air India and Indian airlines were operating separately. Both were owned by the Government of India. The Government of India then announced that both the airlines will be merged. A company called the National Aviation Company of India Limited (NACIL), now known as Air India Limited was established as the holding company and its subsidiaries. The merger came into effect on 27thFebruary, 2011.

Financial Crisis Faced

Air India and Indian Airlines were in losses in 2006-2007. The total losses summed up to US$ 130 million. By March 2011, this had zoomed up to US$ 7.2 billion. The reason for the loss was claimed to be the badly timed merger of the airlines. In addition to that, the decision to buy new planes was also cited as one of the reasons. Due to the rising international fuel prices, the Government of India pumped in billions of rupees into Air India. It bailed out Air India in March 2012.

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The crisis
Air India and Indian Airlines had incurred a loss of Rs. 541.30 crores and Rs. 230.97 crores respectively during 2006-07. On Aug 23, 2007 the government formally announced the merger of Air India and Indian Airlines into a new company. The new company was called National Aviation Company of India Limited or Nacil. Merging the two companies however did not give any profitability as Nacil posted a loss of Rs 2226 crore in 2007-08.

Union of Air India

The union in Air India is a combination of 13 unions. The management has recognised these 13 unions for the purposes of negotiation. The 8 unions representatives are Indian Pilots Guild Air India Officers Association Air India Engineers Association Air India Employees Union Air India Cabin Crew Association Air India Aircraft Engineers Association All India Service Engineers Association Air Corporation Employees Union.

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History of IR in Air India

Strikes in 2009 In June 12 2009, Air India issued a circular mentioning that the salary will be delayed by 15 days due to a cash crunch. The move to delay salary payments was expected to exert pressure on the government to bail out the airline.On July 3, about 300 Air India staff had a strike against delay in the payment of June Salaries. The protest was called by Aviation Industry Employees Guild (AIEG), Air Corporation Employees Union (ACEU) and some other unions. Employees came out of their offices in Delhi and Mumbai and staged demonstrations besides threatening to boycott their meetings with the management. However there was no disruption of AI services.On June 24, Air India was set to map a revival plan that included cost-cutting measures. These were the conditions set as part of for a government rescue plan. This included financial and manpower restructuring by the company. As a part of this plan, Air India announced that it will cut 50% of productivity lined incentives from its 31500 employees which was aimed at saving around Rs 700 crore .The Unions were in strict opposition to the decisionThe Air India management and its unions failed to reach an agreement on a wage cut as a majority of employees opposed any revision. Manpower expenditure constituted the second-largest component of the airlines operational costs after aviation turbine fuel bill.Except one union out of 12, unions turned down the proposal of proposed 50% PLI cut and started hunger strike.Air Corporation Employees Union (ACEU) Regional Secretary, VivekRao submitted a proposal to the Prime Minister on the turnaround plan with alternate expenditure cuts. The protests against this proposed cut continued. On September 26, Two Air India flights from the capital were cancelled due to an agitation called by a section of the national airlines pilots to protest the up to 50% reduction in their productivity-linked incentives (PLIs).In a bid to buy peace with its agitating executive pilots, Air India put on hold the cut in their productivity-linked incentives, but AI pilots stir continued. The AI management held a meeting with 20 Mumbaibased executive pilots and decided to set up a committee to exclusively look into the key issue of PLI cut which triggered the stir. However, talks conducted between Air India management, pilots was not successful and were non- conclusive. On November 3, Air India pilots threatened to go on strike from evening of November 24 and served the management a 14-day notice to meet their demands, including payment of all dues from before and bringing about equity in pay between AI and erstwhile IA pilots by November 10 OnNovember 11, Airline board decided not to pay incentives to top management cadre .The move was opposed and was met with stiff resistance form the employees.

Strikes in 2010 On May 25, 2010, a section of employees of the airline, including engineers, went on a flash strike across the country. Air India had recently decided that the May salaries would be delayed 12 | P a g e

by a week. To protest delay in payment of salaries and highlight the problems of the cabin crew, the employees went on a strike .Employees, including engineers and ground staff, walked out of their offices and staged demonstrations at airports in different parts of the country. At least 10 flights of Air India were cancelled. In response the management issued "gag order" against leaders of all unions of Air India by asking them not to go public with their problems and termed the move as "anti-democratic. Civil Aviation Minister Praful Patel met with Air India CMD Arvind Jadhav to take stock of the situation7. On May 26, after Delhi High Court restrained the employees from continuing with their strike, Air India employees unions decided to call off the strike. Earlier the government had given a free hand to Air India to crack down on a section of its employees on strike calling their actions as irresponsible. AI terminated the services of 17 union leaders, suspended 15 engineers and penalised several others who boycotted work. Air India was in the process of completing legal formalities to de-recognise the two unions who had called the strike.The crackdown like no other was done with the is intention of making an example of the strike leaders, and discouraging such acts of indiscipline in the near future On May 27, The Air Corporation Employees Union, served another notice for a fresh strike from June 12 in response to the management de-recognising its two major trade unions, sealing their offices and sacking employees today in an unprecedented crackdown All India Aircraft Engineers Association and the Air Corporations Employees Union. On June 9, a section of Air India unions withdrew its proposed strike call after a conciliation meeting with the Chief Labour Commissioner in New Delhi.

Strikes in 2011 On April 27, 2011, the Indian Commercial Pilots Association (ICPA), representing pilots of erstwhile Indian Airlines, stopped work from the early hours after giving a strike notice on 23Feb-2011. They were demanding higher emoluments and equity in pay and allowances of pilots belonging to erstwhile Air India. The strike notice given by ICPA on 23 February was seized in conciliation and the last of the proceedings were held on 26 April wherein managements continued efforts to sit across and have a meaningful dialogue were refused by ICPA. The ICPA proceeded on strike despite pendency of proceedings in conciliation and their assurance to theDelhi High Court. Even in case of failure of negotiations and a reference of the disputes is made to the Tribunal; no strike is legally permitted during the pendency of the case before the

http://www.hindu.com/2010/05/26/stories/2010052664761700.htm

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Tribunal.The strike was therefore not legal. Keeping this in mind the management de-recognised ICPA and sealed their offices. The Delhi High Court ordered the strikers to return to work with the carrier claiming that the strike is "illegal" and the strikes have "committed contempt of court". The Court also pointed out that the management had not addressed the pilots demands over an extended period of time. Meanwhile, the Government had appointed an Expert Committee headed by a retired Justice of Supreme Court, Shri Dharamadhikari for examining the principles of integration, pay equity between all employees of erstwhile airlines and suggest harmonised working conditions for various levels.

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Timeline of the 2012 Strike

Strike in 2012
May 7, 2012: AI pilots go on mass sick leave. AI management suspends all flights to the US, Canada and Europe.

May 8, 2012: AI sacks 10 pilots, derecognizes the union Indian Pilots Guild (IPG) May 9, 2012: Delhi High Court says Air India strike is illegal May 10, 2012: Over 300 pilots report sick, and 45 more are sacked. May 14, 2012: AI board endorses decision to fire striking pilots May 21, 2012: Govt. reaches out to AI unions but sacks 30 more striking pilots, the number of dismissed pilots now goes up to 101 affiliated to the Indian Pilots Guild May 23, 2012: The Delhi high court issues a contempt notice to 67 striking AI pilots and its representative body, Indian Pilots Guild for not complying with its order restraining them from continuing the illegal strike.8 June 4, 2012: 3 striking AI pilots of Indian Pilots Guild appear before DGCA to respond to the show-cause notice issued to them by the DGCA on May 12. June 6, 2012: Ajit Singh says striking pilots will now have to apply as fresh candidates if they wish to join AI June 11, 2012: AI starts process to sack striking pilots June 24, 2012: Agitating AI pilots go on hunger strike July 2, 2012: The Delhi high court asks AI and its pilots, who are on strike for nearly two months over their demands relating to career progression, to amicably settle the issue out of the court. July 3, 2012: The Indian Pilots' Guild announced on Tuesday night that the Air India pilots have called off their 58-day strike.9

On May 7, 2012, Air India pilots go on mass sick leave. The management suspends all flights to US, Canada and Europe.

(Sharma 2012)http://www.mid-day.com/news/2012/jun/250612-Agitating-Air-India-pilots-ready-to-endstrike.htm 9 (Archives 2012)

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On May 8, 2012, Air India sacks 10 pilots who went on mass sick and derecognized the Indian Pilots Guild (IPG). The mass sick leave began with around 150 pilots reporting sick, forcing the airline to cancel four international flights from Mumbai and New Delhi. On May 9, 2012, The Delhi high court restrained Air India pilots owing allegiance to Indian Pilots' Guild from resorting to strike. Terming the pilots' strike as illegal, the Delhi HC observed that this type of strike causes irrecoverable loss to Air India. Earlier, the government expressed readiness to talk to agitating Air India pilots on May 9, but warned that if such actions were repeated, no public money would be put in the ailing carrier for its revival. On May 10, 2012, a section of Air India pilots belonging to IPG continued to disrupt international operations of the airline in gross violation of the restraining order of the Hon'ble Delhi High Court. The agitation termed "illegal" by the court has resulted in disruption of international flights since May 7, 2012, inconveniencing thousands of valued passengers. On May 10, 2012 flights ex-Delhi to Chicago, New York, Toronto, Frankfurt, Paris, Shanghai, Jeddah and from Mumbai to Newark were cancelled. Taking a serious view of the situation, Air India has terminated the services of a total of 46 pilots till now. Air India has also filed a contempt of court petition in the Supreme Court. On May 14, 2012, Air India cancelled 16 international flights as hundreds of pilots stayed away from work during a wildcat strike that has lasted one week. AI board also endorses decision to fire striking pilots. On May 21, 2012, The Minister for Civil Aviation, Mr. Ajit Singh, met the leaders of the various recognized unions and association of Air India today. He emphasized that all employees must maintain peace and harmony to ensure the success of the Turn Around Plan and the Financial Restructuring plan for the revival of the airline. Air India continues to maintain normal operations of its domestic services. There is no effect on Air Indias domestic operations due to the present agitation by a section of the pilots belonging to the IPG. To minimize the inconvenience to its international passengers, Air India also extended the contingency schedule announced earlier for its international operations, up to May 25, 2012. The airline also terminated the services of 30 more pilots who had stayed away from duty by reporting sick. On May 23, 2012, The Air India pilot strike entered its 17th day with the national carriers losses reaching Rs2.7 billion (Dh178.5 million). Losses per day are being contained to downwards of Rs10 crore (Rs100 million) in the current contingency plan, the official said. The Delhi high court issued a contempt notice to 67 striking AI pilots and its representative body, Indian Pilots Guild for not complying with its order restraining them from continuing the illegal strike. On June 4, 2012, three striking Air India pilots of Indian Pilots Guild appeared before DGCA to respond to the show-cause notice issued to them by the DGCA on May 12. The show-cause notices were issued by DGCA to ten sacked pilots after Air India wrote to DGCA to seek an explanation from them as to why their licenses should not be cancelled for not reporting to work. 16 | P a g e

Seven of them had submitted their replies to the notice On June 6; Aviation minister Ajit Singh declared that striking pilots would now have to apply as fresh candidates if they wish to join Air India. The minister's comments came on the 30th day of the agitation when the Indian Pilots' Guild (IPG) members staged silent marches in Delhi and Mumbai to press their demands relating to career progression, apart from reinstatement of their 101 sacked colleagues and restoration of recognition of their union.10 Indicating that the sacked pilots could be replaced by new ones, Singh said 90 pilots were currently undergoing training and would be available for flying in August.11 On June 11, Air India starts process to sack striking pilots. Aviation Minister Ajit Singh gave an indication of that when he said the management of the national carrier would have to decide soon how to deal with the pilots who, he said, were on an illegal strike. The Indian Pilot's Guild, which was spearheading the strike and had been de-recognised, said that, the management was intent on escalating matters rather than resolving them. On June 24, the striking pilots of erstwhile Air India began hunger strikes in both Delhi and Mumbai to pressurize the government to meet their demands. Eight of them decided to go on a fast at JantarMantar on Sunday for at least 48 hours. They said that this would continue till the government agrees to take all of them back; re-recognize their union and discuss their woes. On June 29 the hunger protest by the pilots of Air India (AI) entered its sixth day on Friday. The pilots had been on strike for more than 50 days , making it the longest running pilots' strike in the last 40 years. Two out of the 11 pilots who were on a hunger strike near the 18th century JantarMantar observatory in the city, were hospitalized. On June 30,The Air India strike continued for its 55th day Saturday, taking the national carrier's revenue losses to an estimated Rs.605 crore, while two more of the agitating pilots on a hunger strike were hospitalized12. The pilots were demanding reinstatement of their 101 sacked colleagues and recognition of their union, IPG. However, the airline's management maintained that pilots must end their strike first and that the sacked pilots would be reinstated on a case-by-case basis. A senior airline official told IANS that Air India's executive director, industrial relations Vinita Bhandari has directed the company's doctors to monitor the health of pilots who are on the hunger strike venue13. Revenue losses were nearly Rs.605 crore on various accounts like ticket cancellation, unused labour and bulk of Boeing 777 fleet being grounded. On July 1st as the strike by a section of Air India pilots entered the 57th day, to attain the notorious distinction of becoming the second longest strike in

10 11

http://www.the hindu.com/news/national/ajit-singh-talks-tough-with-agitating-ai-pilots/article3496442.ece http://www.rediff.com/money/report/ministry-rejects-air-india-pilots-talk-offer/20120606.htm 12 http://indiatoday.intoday.in/story/air-india-strike-enters-55th-day-two-more-pilots-hospitalised/1/203193.html 13 http://indiatoday.intoday.in/story/air-india-strike-enters-55th-day-two-more-pilots-hospitalised/1/203193.html

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the country's aviation history.14 After putting forth an original list of 14 demands, the aviators now asked for reinstatement of their 101 sacked colleagues. The Delhi high court asked Air India and its pilots, who are on strike for nearly two months over their demands relating to career progression, to amicably settle the issue out of the court. On July 3, the Indian Pilots' Guild announced that the Air India pilots have called off their 58-day strike.15The pilots decided to call off their strike after AI management assured the court that it would consider the grievances of the pilots "sympathetically".

Demands by the Union

Exclusive flying rights on of dreamliner On May 8, the pilots went on strike in protest against the Air India management's decision to provide Dreamliner, Boeing-787, training to the erstwhile Indian Airlines pilots. Mr. Ajit Singh, the aviation Minister, called this blackmail, highlighting the fact that while the Delhi High Court had upheld the contention of not training the pilots of erstwhile Indian Airlines on the Dreamliner, the Supreme Court had vacated the stay. 2007 onwards payment of arrears The pilots also allege that they have not been paid salaries for the past few months and for the last 5 years even their appraisal are due. They want the backlogs to b e cleared especially for appraisals and if not, then atleast a timeline for that. First Class travelling when not on duty When the strike began one of the demands of the pilot was that they be allowed travelling through first class when they were not working but as the strike progressed this became a nonissue in the standoff. Career Progression: The rights to be promoted within 6 years as commanders just like the pilots of the erstwhile Indian Airlines. Currently, the pilots allege there is no streamlined rule for promotions. Reinstatement of sacked pilots

14

http://india.nydailynews.com/business/b5f612eb2a5fdeeab6bf4f1c8ec388c2/air-india-strike-is-second-longest-inaviation-industry 15 http://www.dnaindia.com/india/1710223/report-air-india-strike-timeline

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The management of Air India and aviation Minister Ajit wanted the pilots to end their strike before the negotiation process started but the pilots stood firm on their demand for the reinstatement of their colleagues sacked by the management. The sacked pilots include the main office bearers of the IPG and a total of 101 pilots.16 Pay parity and Pay increase The pilots of IPG feel that the rival union (ICPA) extracted its pound of flesh from the Government, forcing an agreement that granted them a salary hike up to Rs.1 lakh per month per pilot and thus unjust to them.17 Re-recognize IPG The Air India Management de-recognized the union of Air India Pilots i.e. Indian Pilots Guild (IPG) and thus they wanted the management to re-recognize the union.

Crux of the Issue

The major cause of the strike was the agitation between the pilots of Air India and Indian Airlines. While an erstwhile Indian Airlines pilot gets a promotion from first officer to commander in six years regardless of whether there is a vacancy or not, it takes an erstwhile Air India pilot 10 years to get a similar promotion. Even after completing 10 years, pilots of the erstwhile Air India do not get a promotion if there is no vacancy. "The Indian Airlines pilots fly Airbuses and the Air India pilots fly Boeings. There are many more Airbuses in the fleet, so they get more flying hours and quicker promotion. These caused more stress as Air India decided to get 27 new dreamliners which will need around 432 cabin crew members and thus will favour the Indian Airlines Pilots in their career progression and many pilots in Air India might need to wait for next 14 years.18

16

(What The Pilots Want 2012): http://indiatoday.intoday.in/story/eye-of-the-storm-what-thepilots-want-from-air-india/1/198584.html

17

(Nayyar 2012): http://indiatoday.intoday.in/story/air-india-pilots-strike-ajit-singh-nationalcarrier/1/189352.html 18 (Nayyar 2012)

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Union and Management Perspective

The Air India Pilots strike which started on May 7, 2012 was the longest pilot stir in 40 years. The government-carrier Air India airlines lost Rs 500 crores revenue in the on-going strike, as the airline incurred losses of about Rs 10 crores per day. The airline management was forced extend its contingency plan for the fourth time during the strike, in which interim schedule for international flights was extended till July 31 or unless the strike is called off before that day. Under the interim schedule, Air India operated 38 international flights per day instead of 45 that it operates under normal conditions.

UNIONS VIEW:
Though AI had been reeling under heavy losses, there had been three strikes by pilots in the last three years. Successive managements have been insensitive to union issues. The pilots went on strike on May 8, 2012 to protest against the airlines decision to train the erstwhile Indian Airlines (IC) pilots for the soon-to-be inducted Dreamliner aircraft. The management derecognized the union of the AI pilots named Indian Pilots Guild (IPG) when they went on strike. The root cause of the strike was the 2007 merger of Indian Airlines and Air India that led to the formation of a unified carrier. The existent HR issues were cited as problems before it was decided to merge; these were not addressed even after the merger. The civil aviation ministry was entrusted with the responsibility of guiding the merged airline and resolve the disparities and other issues. It appointed the Justice Dharmadhikari Committee for the purpose only in May 2011, three years and eight months after the merger. 1. Training and Development: The latest decision taken by the Air India management on the Boeing 787Dreamliner issue to send pilots from the erstwhile Indian Airlines for training instead of erstwhile Air India trigged off the 58-day pilots strike that wrecked the airlines flight schedule during the peak travel season. It turned out to be another example of mismanagement and political interference involved in running of this government-backed carrier. The first batch of IC pilots were sent by the airline management to Singapore for B787 training on May 6 without any talks with the pilots from erstwhile Air India. In response, they went on a strike from May 7 onwards. After the 32 IC pilots were back after completing their B787 training, the airline management asked them to do a refresher course and go back to flying A320aircraft, which they already flew before they were sent for the Dreamliner training thus making the training program ineffective altogether. The B787 was the first aircraft-type for 20 | P a g e

which the management decided that pilots from both the sides of the merged airline those from the erstwhile Air India and Indian Airlines respectively would be sent to train on it and fly it but the training issue turned into a contentious one due to the unjustified acts of management. 2. Career Progression Discussion: The airline management were in talks with pilots from the erstwhile Air India to solve their career progression issues as they would have to share their B787 flights with Indian Airlines pilots. But even before any conclusion was reached the management decided to send IC pilots for B787 training on May 6 without any warning. This was the main reason the strike broke out. If the management had been careful and effectively followed HR policies, and consequently reached an agreement with the AI pilots on their career progression issue before sending the IC pilots for training the strike would not have happened? Air India being a government-carrier and it has taxpayers money to bail it out, the officials who took the decision to send the IC batch of pilots to train on May 6 refuse to comment which otherwise would have faced really tough questions. They had taken decision under duress to appease one section of employees at the expense of others.

MANAGEMENTS VIEW:
The pilots went on strike on May 7 over demands for better career progression programs. The airlines management took a tough stand sacking 101 pilots including 10 office bearers of the IPG. Union Civil Aviation Minister termed the Air India pilots strike as illegaland appealed the pilots to resume their jobs and assured that the ministry will solve the problems within a period of three months as they already have received a package of Rs 30,000 crores for the revival of merged airline. However, the airline management recruited more pilots from Uzbekistan airways. The on-going protest by the Air India pilots had cost the airlines Rs 200 crores as the strike forced the carrier to curtail its international flight operations. Some of the pilots demands, such as they should decide who should be allowed to train on the new generation aircraft, was pointless as it should be a management decision guided solely by the interests of the airline. While pilots should follow the industrial laws applicable for strikes, they earn salaries that appear huge to a common man but are largely in tune with global standards. Regarding the case of overpaying the pilots, the concerned management personnel who have signed such obnoxious agreements should have been held guilty and accountable. Well-paid pilots certainly dont deserve to be deemed workmen, but the description has legal validity. AI had for years drawn the attention of the authorities to this anomaly, but to no effect.

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Although the Delhi High Court pulled up the Air India management for delaying the reinstatement of the 101 sacked commanders out of the 450 striking pilots, the government remained firm that restoration of jobs of the terminated pilots would be on a case-to-case basis. It was deemed that such a response came as the management put efforts to rationalize Air Indias international operational cost, thus reducing the total number of pilots for overseas routes by 40% It was a widespread view that the Airline Management was not only using the opportunity to cut excess workforce but also send out a message that it will be tough on those who jeopardize operations, especially at a time when the airline is struggling to stay afloat. Moreover, they proposed a medical teat of all the pilots while they will be reinstated in the airlines, as the airline would then require fewer pilots, but also many of them would lose their licenses if they are unable to clear the medical tests the company plans to test them on. The above measure came in response to the method followed by the pilots to go on astrike. They had claimed sickness for two months and hence, verification of the two-month long sickness and related tests and reports may catch pilots on the wrong foot. As per Rule 42 (2) of the Aircraft Rules, 1937, the holder of a license shall not exercise the privileges of his license without being declared fit after a fresh medical examination in the event of his having "a sickness or injury involving incapacity for a period of fifteen days or more for which he is licensed..." 19 According to a letter by the Director-General of Medical Services (Air), prescribing the procedure on sickness examination, for a no-objection certificate (NOC) will have to be applied by its medical department to Director of Medical Services at DGCA for each pilot.

AIR INDIA PILOTS STRIKE ENDED AFTER 58 DAYS:

The 58 days strike was ended as a result of legal on 4th July after the Delhi high court asked them to join duty within 48 hours and the management to sympathetically consider their grievances. Indian Pilots Guild (IPG) thanked the Delhi high court, for mediating in this issue, which was critical for their jobs and the survival of Air India and is in the national interest. It said that as directed by the high court, the IPG anticipated negotiations with the AI management on all the pending issues in the presence of the chief labourcommissioner,including the issue of reinstatement of the pilots whose services were terminated as a consequence to the strike. 434 striking pilots numbering were to join their duties in 48 hours. Justice Khetrapal, who also sought a report from the conciliator by July 9, sought to an application of the IPG which had

19

(http://ibnlive.in.com/news/sacking-all-440-air-india-pilots-inevitable-sources/265401-3.html 2012)

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expressed that the management has created a "hostile environment" by terminating the services of the striking pilots and also derecognizing it. The court instructed the pilots as well as the management to appear before the conciliator, chief labour commissioner N K Prasad, on July 6. The airlines management asked the court to not to entertain the pilots plea as they were in contempt. They were ready to talk to the pilots once they call off their strike. The pilotswere in complete disobedience of the courts orders for the last two months and hence they needed to call off the strike before talking to the management regarding their demands. The management demanded that first they should obey the courts order and then come to the management, to which, the court asked the pilots to call off their strike.20

20

(Hindustan Times 2012)

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Recommendations
Air India should appoint a professional Chief Executive Officer who should be backed by a group of strong board of directors and let him take decisions on his own will Since Air India has 214 employees per plane, which is very high, it should cut down on this and carry out a spin-off of the ground handling and maintenance, repair and overhaul operations. Air India can also offera voluntary retirement scheme to its employees Air India needs good human resource integration, as its workforce is not aligned properly. For this they need to cut down layers of management, align their employees by designated roles, bring in lateral hires, improvise customer facing functions Air India should implement training and development programs for its employees Air India should come up with only one type of aircraft since India is a price sensitive market and it is going into losses having more than one type of aircraft carrier Air India had losses of more than 40,000 Cr Rupees in 2011 so it should cut down on its expenses Air India should also incorporate incentive plans for its employees Since Air India is suffering from internal conflicts, efforts should have been made by the management to resolve these issues by giving Air India pilots first chance for training rather than sending Indian Airlines pilots first Air India is a government owned airline so there is a lot of political interference. This results in delays in strategic decisions and result in failures for the company. This can be taken care of if foreign investment is allowed in the company HR policies of Air India and Indian Airlines should be integrated for smooth functioning of the recruitment and hiring process as well as promotions of their employees. This will help in diffusing workplace issues Air India and Indian Airlines are having different working hours for their employees which is not acceptable so it should have same time schedule for all its employees Medical facilities given to AI and IA employees are different. This should be corrected by the management and same facilities should be given to all the employees Most of the training facilities for the staff are old fashioned and obsolete. New infrastructure should be built and modern facilities should be given

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Conclusion
The whole nation had been badly gripped by the Air India Crisis. The turmoil, widespread agitation with the pilots adamant on not flying and the management firm on their end to not hold any dialogue with the pilots. The air traffic of India in the peak holiday season suffered a major setback, so as to business class travelers choosing trains over aircrafts. If all is to be believed Air India manly is suffering mainly due to internal conflicts, and less because of external factors. There are two parallel systems working side by side in the Indias public sector carrier and the pilots agitation has left nothing much to be revealed. So, basically the core reason behind the downfall of Air India has been attributed to the unhappy merger of the two airlines Indian Airlines (IA) and Air India (AI) in 2007.Five years down the line, from a staggering 60%, the market share now has gone down to a mere 17%, with problems cropping ever since the inception of the merged entity. The split is wide open between the two merged entities despite the fact that they share common office areas and most importantly the common brand name. There is a constant tussle to compete with each other rather with the other carriers of the country. And as the private carriers are gaining momentum, Air India has been losing both passenger and cargo traffic. The govt. has also openly admitted the fact that only 70% of the proceedings of the merger are complete. And the biggest loophole here comes from the fact that the Human resources (HR) department of the two entities is not unique till date. This has resulted in disparity between the policies related to pay scales, incentives, allowances and career progression. Also, carrying forward the tussle between the pilots and cabin crew from both sides, the ground staffs, managers and other junior staff are also fighting over more or less the same issues including holidays over the year. Initially, what looked like an issue with pilots, has just led to expose the deeper and darker picture as there is resentment voiced over the merger by employees from other functionaries too. A senior official working with the operations vertical has quoted there is bound to be resentment among the employees, if colleagues from the other side with the same job profile are getting a better career growth or promotions and higher allowances. The company does not show any integration below the rank of DGM (deputy General Manager). There is prevalence of two unique systems for promotions, allowances and even foreign deployments. Also, pointed out by an official from the airlines cargo division was that the two entities continued to have a very different promotion policy. IA had a very well defined policy

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for promotions which involved written tests and strict HR interviews. On the contrary, AI had a system wherein the head of the department had the authority to promote at his /her discretion. The two unions, Indian Pilots' Guild (IPG) of the Air India employees and the Indian Commercial Pilots' Association (ICPA) representing pilots from erstwhile Indian Airlines are constantly at loggerheads. In May, 2011, nearly 700 members from the ICPA went on strike demanded parity of pay citing reasons that their IPG counterparts received additional benefits like international allowances, stay allowances, etc. as they were the ones flying on international routes. The Dharmadhikari report has made recommendations on core HR issues like career growth, common pay scale, overall restructuring of the staff from both sides among other issues. But, in 2012, the scene reversed and the pilots representing IPG went on strike but this time it was for who gets to fly which aircraft. Historically, AI had preferred Boeing, and IA, Airbus. After the merger, from the previously placed orders, Boeing came first and pilots from AI were only permitted to fly them. And now, 787 Dreamliner is the most sought after plane to be flown, so the management proposed to give equal opportunities to pilots from both entities. Captain TauseefMukadam, from the Indian Pilots' Guild, said: "For an Airbus pilot to train on Boeing, it takes nearly six months and costs at least 10m rupees ($185,000; 115,000). But for a Boeing pilot to train on a Boeing 787 the cost is less than 3m rupees and the time taken is two months. "Now when the company is going through losses, how can they justify this kind of expenditure?"21 After 58 days, though the strike was called off by the Indian Pilots' Guild, the Delhi High Court which had initially called the strike illegal, ordered the pilots to resume duty and the management to look into the pilots demands.

Therefore, the root of the problem has always been the untimely and a very inefficient merger of AI and IA, which has been the primary reason for the never ending problems of the present Air India. Also, the purchase of Dreamliners has been criticized at a time when the Airline was reeling under great debt.

21

(Kannan 2012)

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Bibliography
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