air india & indian airlines strike

8/14/2019 Air India & Indian Airlines Strike

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Program & Batch: PGDM(2012-14)

Term: V

Course Name: Industrial Relations and Labour Laws

Name of the faculty: D.P.Sahoo

Topic/ Title : AIR INDIA 2012 STRIKEIR ISSUES

Original or

Revised Write-up:

Original

Group Number: 3

Contact No. and email of

Group Coordinator:

Shreya Trivedi

[email protected]

Group Members: Sl. Roll No. Name

1 12HR-022 Ramya Krishnan

2 12HR-023 Rashmi Tripathy

3 12HR-026 Sanya Sharma

4 12HR-030 Shreya Trivedi

5 12HR-031 Sweta Rani

6 12HR-032 Tanubhav Tyagi


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Industrial Relations & Labour Laws

AUGUST 2013

AIR INDIA 2012 STRIKEIR ISSUES

Group 3 (Collective Bargainers)


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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 .......................................................................................................................... 12Strikes 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


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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 Indiasflying 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


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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 4thJuly, 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 offthe 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 theinternational 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 Airwaysand Air Saharas establishment. These changesin 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

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 scheduleddomestic airlines were 20.289 mn, revealed the official statistics.

No-frill carrier IndiGo leads in terms of market share with 29.8%, followed by JetAirways-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 aconsiderable 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 theentire Indian airline industry came into force.

2(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 1

St

private airline since 1953.

3

List of Operational Airlines

Airline Call SignCommenced

OperationsHeadquarters Status

Air India AIRINDIAOctober 1932

(as Tata Airlines)Mumbai National Carrier

Air India Express EXPRESS INDIA April 2005 Kochi Scheduled

Air India Regional ALLIED1996

(as Alliance Air)Mumbai Scheduled

Air Odisha November 2012 Bhubaneswar Non-Scheduled

Blue Dart Aviation BLUE DART 1995 Chennai Cargo

Club One Air August 2005 Mumbai Non-Scheduled

Chhattisgarh Air Link 2012 Raipur Non-Scheduled

Deccan 360 DECCAN CARGO 2009 Bangalore Cargo

Deccan Charters DECCAN 1997 Bangalore Non-Scheduled

Deccan Shuttles DECCAN 2012 Ahmedabad Non-Scheduled

GoAir GOAIR June 2004 Mumbai Scheduled

IndiGo IFLY August 2006 Gurgaon Scheduled

Invision Air March 2011 Mumbai Non-Scheduled

Jagson Airlines JAGSON November 1991 Delhi Scheduled

Jet Airways JET AIRWAYS May 1993 Mumbai Scheduled

Quikjet Cargo QUIKJET Feb 2012 Bangalore Cargo

SpiceJet SPICEJET May 2005 Chennai Scheduled

TajAir November 1993 Mumbai Non-Scheduled

3(Naik 2005)
http://en.wikipedia.org/wiki/IndiGohttp://en.wikipedia.org/wiki/IndiGohttp://en.wikipedia.org/wiki/Gurgaonhttp://en.wikipedia.org/wiki/Gurgaonhttp://en.wikipedia.org/w/index.php?title=Invision_Air&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Invision_Air&action=edit&redlink=1http://en.wikipedia.org/wiki/Jagson_Airlineshttp://en.wikipedia.org/wiki/Jet_Airwayshttp://en.wikipedia.org/wiki/Jet_Airwayshttp://en.wikipedia.org/w/index.php?title=Quikjet_Cargo&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Quikjet_Cargo&action=edit&redlink=1http://en.wikipedia.org/wiki/SpiceJethttp://en.wikipedia.org/wiki/TajAirhttp://en.wikipedia.org/wiki/TajAirhttp://en.wikipedia.org/wiki/TajAirhttp://en.wikipedia.org/wiki/SpiceJethttp://en.wikipedia.org/w/index.php?title=Quikjet_Cargo&action=edit&redlink=1http://en.wikipedia.org/wiki/Jet_Airwayshttp://en.wikipedia.org/wiki/Jagson_Airlineshttp://en.wikipedia.org/w/index.php?title=Invision_Air&action=edit&redlink=1http://en.wikipedia.org/wiki/Gurgaonhttp://en.wikipedia.org/wiki/IndiGo


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(as Megapode)

Ventura Airconnect AIRCONNECT July 2011 Gurgaon Non-Scheduled4

4(List Of Airlines Of India: Wikipedia 2013)
http://en.wikipedia.org/w/index.php?title=Ventura_Airconnect&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Ventura_Airconnect&action=edit&redlink=1http://en.wikipedia.org/wiki/Gurgaonhttp://en.wikipedia.org/wiki/Gurgaonhttp://en.wikipedia.org/wiki/Gurgaonhttp://en.wikipedia.org/w/index.php?title=Ventura_Airconnect&action=edit&redlink=1


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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 Indianmerger. The merger took place on 27 thFebruary,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(J._R._D._Tata 2011)

6(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 Mumbai-

based 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


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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 termedthe 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

erstwhileIndian Airlines,stopped work from the early hours after giving a strike notice on 23-

Feb-2011. They were demanding higher emoluments and equity in pay and allowances of pilots

belonging to erstwhile AirIndia.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 totheDelhi 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

7http://www.hindu.com/2010/05/26/stories/2010052664761700.htm
http://centreforaviation.com/profiles/airlines/air-india-aihttp://centreforaviation.com/profiles/countries/indiahttp://centreforaviation.com/profiles/countries/indiahttp://centreforaviation.com/profiles/airlines/air-india-ai


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Tribunal.The strike was therefore not legal. Keeping this in mind the management de-recognised

ICPA and sealed their offices. TheDelhi 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 ExpertCommittee 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.
http://centreforaviation.com/profiles/airports/delhi-indira-gandhi-international-airport-delhttp://centreforaviation.com/profiles/airports/delhi-indira-gandhi-international-airport-del


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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 courtissues a contempt notice to 67 striking AI

pilots and its representative body, Indian

Pilots Guild for not complying with itsorder restraining them from continuing the

illegal strike.8

June 4, 2012: 3 striking AI pilots ofIndian 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 candidatesif 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 Indiapilots 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.

8(Sharma 2012)http://www.mid-day.com/news/2012/jun/250612-Agitating-Air-India-pilots-ready-to-end-

strike.htm9(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 observedthat 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, AirIndia 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 FinancialRestructuring 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 PilotsGuild 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.


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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.10Indicating 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 andMumbai 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 thehunger 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

. Thepilots 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 1stas 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

10http://www.the hindu.com/news/national/ajit-singh-talks-tough-with-agitating-ai-pilots/article3496442.ece11http://www.rediff.com/money/report/ministry-rejects-air-india-pilots-talk-offer/20120606.htm12http://indiatoday.intoday.in/story/air-india-strike-enters-55th-day-two-more-pilots-hospitalised/1/203193.html13http://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.14After 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 Airlinespilots. 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 non-

issue 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

14http://india.nydailynews.com/business/b5f612eb2a5fdeeab6bf4f1c8ec388c2/air-india-strike-is-second-longest-in-aviation-industry15http://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 re-

instatement 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 increaseThe 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 IndianAirlines. 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-the-

pilots-want-from-air-india/1/198584.html

17(Nayyar 2012):http://indiatoday.intoday.in/story/air-india-pilots-strike-ajit-singh-national-

carrier/1/189352.html18

(Nayyar 2012)
http://indiatoday.intoday.in/story/eye-of-the-storm-what-the-pilots-want-from-air-india/1/198584.htmlhttp://indiatoday.intoday.in/story/eye-of-the-storm-what-the-pilots-want-from-air-india/1/198584.htmlhttp://indiatoday.intoday.in/story/eye-of-the-storm-what-the-pilots-want-from-air-india/1/198584.htmlhttp://indiatoday.intoday.in/story/eye-of-the-storm-what-the-pilots-want-from-air-india/1/198584.htmlhttp://indiatoday.intoday.in/story/air-india-pilots-strike-ajit-singh-national-carrier/1/189352.htmlhttp://indiatoday.intoday.in/story/air-india-pilots-strike-ajit-singh-national-carrier/1/189352.htmlhttp://indiatoday.intoday.in/story/air-india-pilots-strike-ajit-singh-national-carrier/1/189352.htmlhttp://indiatoday.intoday.in/story/air-india-pilots-strike-ajit-singh-national-carrier/1/189352.htmlhttp://indiatoday.intoday.in/story/air-india-pilots-strike-ajit-singh-national-carrier/1/189352.htmlhttp://indiatoday.intoday.in/story/air-india-pilots-strike-ajit-singh-national-carrier/1/189352.htmlhttp://indiatoday.intoday.in/story/eye-of-the-storm-what-the-pilots-want-from-air-india/1/198584.htmlhttp://indiatoday.intoday.in/story/eye-of-the-storm-what-the-pilots-want-from-air-india/1/198584.html


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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 May2011, 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


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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 decisionto 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. Theairlines 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 appealedthe 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 onthe 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 thatappear huge to a common man but are largely in tune with global standards. Regarding thecase 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 haslegal 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 thereinstatement 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 theairlines, 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 Rule42 (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 theDirector-General of Medical Services (Air), prescribing the procedure on sicknessexamination, 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 ofreinstatement 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 bya 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 onthis and carry out a spin-off of the ground handling and maintenance, repair and overhauloperations.

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 itsexpenses

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 trainingrather than sending Indian Airlines pilots first

Air India is a government owned airline so there is a lot of political interference. Thisresults in delays in strategic decisions and result in failures for the company. This can betaken care of if foreign investment is allowed in the company

HR policies of Air India and Indian Airlines should be integrated for smooth functioningof the recruitment and hiring process as well as promotions of their employees. This willhelp in diffusing workplace issues

Air India and Indian Airlines are having different working hours for their employeeswhich 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 correctedby 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. Newinfrastructure 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 thepilotsadamant 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, andless 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 theunhappy merger of the two airlinesIndian 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 amere 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 sharecommon 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 themerger 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, theground 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 anddarker 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 beresentment among the employees, if colleagues from the other side with the same jobprofile are getting a better career growth or promotions and higher allowances.

The company does not show any integration below the rank of DGM (deputy GeneralManager). 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 entitiescontinued 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 IndianCommercial 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 payciting 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 careergrowth, 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 thistime it was for who gets to fly which aircraft.

Historically, AI had preferred Boeing, and IA, Airbus. After the merger, from thepreviously 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 totrain 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 HighCourt which had initially called the strike illegal, ordered the pilots to resume duty and

the management to look into thepilots 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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