More Turbulence

AIR India, the country's premier international carrier, seems to be headed for another troubled year. A prolonged agitation by its 500-strong All India Aircraft Engineers' Association (AIAEA) is threatening to paralyse AI operations worldwide. The reason: a significant section of the airlines' employees is demanding incredible wage hikes—at the cost of the exchequer.

Aviation analysts say this trend is likely to plague domestic aviation in the months to come. The latest fracas in Air India is symptomatic of this malaise. Negotiations between the engineers and the AI management to increase salaries have been on since last year. Then, without any apparent provocation, on February 20, the engineers issued a directive 'advising' members not to undertake routine jobs on some pretext or the other. According to AI estimates, on that day itself, more than 50 flights were disrupted the world over with passengers stranded at various airports.

Just what are the engineers demanding? As part of the talks being held, the AI management had offered a monthly emoluments package, which included a productivity-linked agreement, of Rs 70,000 to the engineers—a straight jump from the Rs 25,000 that technicians were getting. Says AI Managing Director Brijesh Kumar, a career bureaucrat who has been connected with aviation for the last decade or so: "We were offering them the best deal possible. We matched it with the best available in the market."

Apparently, that was not enough. The AIAEA then demanded salaries that matched those of engineers of Singapore International Airlines. And how much was that? According to a member of the AI Engineers' Union, it had demanded a five-fold increase in monthly emoluments, taking their total package to Rs 1.5 lakh. In addition, it demanded that engineers be paid money equalling 66 per cent of a Boeing 747 aircraft commander's salary.

The AI management hit back. On February 26, it announced a contingency plan wherein it was forced to curtail its flights by about 20 per cent worldwide. According to AI estimates, the plan provides for operation of up to 80 per cent of the normal flight schedule without delinking any of the 39 international stations spanning the five continents on its network. AI spokeswoman Rohita Jaidka says that the curtailment is so designed that inconvenience to passengers is minimised. "Most of the passengers of the cancelled flights have been accommodated on other AI flights," she affirms. But ever since the agitation began, more than 10 per cent of AI passengers have had to move over to other international carriers, all cut-throat competitors of AI.

The management did not stop here. On March 1, Kumar threatened a 'partial lockout' in Air India if the employees did not return to work. Earlier, he suspended 12 aircraft engineers and directed 66 others not to return to duty following their involvement in the strike. AI Chairman Russi Mody called upon the agitators to return to work or face the consequences.

But true to tradition in the aviation sector, the strikers refuse to relent. Emphasises their spokesman: "It is a management canard that we are agitating. We are just registering our protest."

For the management, the contingency plan is at best temporary and can last for a period of three months. Meanwhile, AI has put its 40-strong executive cadre engineers into action. In addition, it has pressed into service its five wet-leased aircraft which together account for 31 flights a week. AI's own fleet of 26 aircraft operate 114 flights with 33,208 seats on offer a week.

Like Indian Airlines (see Outlook, March 6), AI has always bought peace. Mostly at a heavy cost. In 1991, it lost Rs 5.5 crore due to industrial unrest. This had climbed to a whopping Rs 117 crore in 1993 but was brought down to Rs 50 lakh in 1995. The payoff was on harsh terms. The AI management had to sign peace agreements with three major unions—the Air India Cabin Crew Association, the Air India Employees' Guild and the Air India Flight Engineers' Association.

Senior officials say this year the airline was poised to do well. Its capacity had actually increased by 15 per cent, it was carrying 25 per cent more passengers and the load factor had gone up by five per cent over last year. The situation seems to be back to square one. Says Ratan Singh, an exporter who flies to Europe at least once a week: "I have no option but to travel by other airlines. My business will suffer otherwise." This is the point that should worry the authorities the most. With the threat of a lockout looming large, it will be difficult to persuade even faithful passengers to remain in the Air India fold.