Alliance In The Air

INDIAN Airlines offers what other airlines can't. Another airline," announced a publicity brochure last month. Even as aviation watchers were taken by surprise, Indian Airlines authorities con-firmed that they had set up a separate entity called Alliance Air, which would take over some of the operations of its parent body, particularly in sectors that are poorly connected. A move necessitated by the fact that private airliners like Modiluft, East West, Jet Airways and Damania-NEPC, which were meant to operate on such short distances, have not found it financially viable.

Another theory doing the rounds is that IA, which has been talking in terms of refurbishing its somewhat aged fleet and buying new aircraft, would now be able to get rid of its Boeing 737s. According to IA Managing Director P.C. Sen, the airline will transfer 12 Boeings to the new carrier. IA has a fleet of 52 aircraft of which 32 are Airbus 320s, the rest being Boeing 737s and Airbus 300s. By Sen's estimates, the new airline will earn Rs 70 crore annually.

While the new airline, according to a top IA executive, "reflects the upbeat mood" in the organisation which has been dogged by losses over the past five years, it might create fresh problems for the labour strife-hit airline. One good reason why any of the eight militant unions might take recourse to drastic action is the salaries being offered under the new dispensation.

For a three-year contract, Alliance Air salaries are significantly higher than those of IA, where a Boeing commander makes between Rs 80,000 and Rs 1 lakh a month. For flying 65 hours a month, an Alliance commander flying a Boeing will get Rs 1.78 lakh while a young co-pilot will make Rs 98,000 for the same number of flying hours. As per the terms of the Alliance contract, "a minimum salary of Rs 1.34 lakh will be paid to a commander based on 45 hours of flying a month. If he does not make himself available for the minimum hours, the salary will be adjusted on a pro-rata basis after three months."

Offers have already been made to 14 commanders and 13 copilots, of whom three commanders and eight co-pilots have already signed the deal. And the planes are slowly being shifted from IA to Alliance.

So what are the economics of running a separate airlines when the parent company itself is in the red to the tune of Rs 200 crore? Says the newly-appointed Alliance Air Managing Director Vinoo Kashyap: "The profit angle has been worked out. Alliance Air will operate specific sectors in states in accordance with the requirements of the particular state government and the pro-fit or loss would be shared between the state government concerned and the airline."

But that, as some of the unions have been saying, is the same kind of plan that the Civil Aviation Ministry had in mind when the ambitious Vayudoot project was announced. Today it lies in a shambles, most of its staff unemployed for several years, others picking up salaries without any work and have only now been employed in Alliance Air. Kashyap also dis-counts critics' charges that IA dumped its fuel-guzzling Boeing 737s on Alliance Air to show healthier figures: "This is not true. IA needs to operate with one type of aircraft. The Airbus A-320 and A-300 will remain with IA once we take over the Boeings and will help in streamlining maintenance and increase aircraft utilisation."

 So just what is Alliance Air's status going to be vis-a-vis IA? According to sources, Alliance is meant to be an independent entity, but with an equity participation of Rs 2 crore from IA. Airline officials claim the move may already be paying off in one area at least. For instance, a number of pilots with private airliners who had left IA in the last few years, are knocking at the doors, even though private airliner pilots deny any such move. But if it happens, it could mean sweet revenge for IA which lost over 100 pilots to different private airliners since the open sky policy came into effect in 1992. "There are 260 applications already from pilots," said an Alliance Air official. Could this be a roundabout way of getting people back into the pilot-starved IA? Top airline officials prefer not to reply. With the new airline beginning operations on April 15, the coming few weeks are going to be crucial.