Restoring Air India's health

After ten long and agonising days, the strike by the Air India pilots was called off, thanks mainly to the government turning sensible by opting for conciliation over a witch-hunt. With 800 pilots, mostly those who were originally with Indian Airlines, striking work demanding pay parity with their counterparts who had been with Air India prior to the merger, the rate of flight cancellation rose close to 90 per cent towards the end of the strike period. It was left to the Union Civil Aviation Ministry to intervene, negotiate with the pilots union, and bring about a settlement — albeit a temporary one. Considering that the strike, which came at the height of the summer vacation season, resulted in a loss of Rs.150 crore to Rs.200 crore, it is difficult to understand why the government did not intervene earlier. The strategy and methods of the Air India management clearly worsened the situation. The basic demand of the pilots was neither new nor unreasonable: they have been seeking pay parity ever since the merger process began in 2007. It is hard to explain why the process should drag on endlessly and why most of the demands of the staff have not been seriously addressed for such a long time.

Under the interim settlement, the Ministry has given some concrete assurances. All the dismissed and suspended pilots will be reinstated; the de-recognition of the Indian Commercial Pilots' Association will be revoked; and all the other demands of the pilots will be addressed in a “time-bound” manner. The key issue of pay parity will be dealt with by the Dharmadhikari committee, which has just begun to look into the staff-related issues arising from the merger of the two airlines, and it has been required to give the report by November 2011. All categories of employees have been asked to approach it with their demands. At least this time, the Air India management must keep its word and resolve the issues by adopting a businesslike consultative process in all seriousness and sincerity. For their part, the employees and their unions must respond positively to the challenges that lie ahead. Though the national carrier has been claiming “operational profits,” the accumulated losses and its undue dependence on funding by government tell a different story. Air India needs to be run on sound commercial lines, which means it must not be discriminated against vis-à-vis the private airlines. For that to happen, it must set its own house in order, go ahead and complete its programme for aircraft acquisition, do everything necessary to restore the prestige of the ‘Maharajah' brand in a competitive environment, and win back customer loyalty.