Indian Airlines HR Problems
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‘FIGHTER'PILOTS?IA's eight unions were
notorious for their defiant attitude and their use of unscrupulous methods
to force the management to agree to all their demands. Strikes, go-slow
agitations and wage negotiations were common.
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For each strike there was a different reason, but
every strike it was about pressurizing IA for more money. From November
1989 to June 1992, there were 13 agitations by different unions. During
December 1992-January 1993, there was a 46-day strike by the pilots and
yet another one in November 1994. The cavalier attitude of the IA pilots
was particularly evident in the agitation in April 1995.
The pilots began the agitation demanding higher allowances for flying in
international sectors. This demand was turned down. They then refused to
fly with people re-employed on a contract basis. Thereafter they went on
a strike, saying that the cabin crew earned higher wages than them and
that they would not fly until this issue was addressed. |
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Due to adamant behaviour of pilots many of the cabin
crew and the airhostesses had to be off-loaded at the last moment from
aircrafts. In 1996, there was another agitation, with many pilots reporting
sick at the same time. Medical examiners, who were sent to check these
pilots, found that most of these were false claims.
Some of the pilots were completely fit; others somehow managed to produce
medical certificates to corroborate their claims. In January 1997, there was
another strike by the pilots, this time asking for increased foreign
allowances, fixed flying hours, free meals and wage parity with Alliance
Air.
Though the strike was called off within a week, it again raised questions
regarding IA's vulnerability. April 2000 saw another go-slow agitation by
IA's aircraft engineers who were demanding pay revision and a change in the
career progression pattern[1]. The strategies adopted by IA to overcome these
problems were severely criticized by analysts over the years. Analysts noted
that the people heading the airline were more interested in making peace
with the unions than looking at the company's long-term benefits.
Russy Mody (Mody), who joined IA as chairman in November 1994, made efforts
to appease the unions by proposing to bring their salaries on par with those
of Air India employees. This was strongly opposed by the board of directors,
in view of the mounting losses. Mody also proposed to increase the age of
retirement from 58 to 60 to control the exodus of pilots.
However, government rejected Mody's plans[2]. When Probir Sen (Sen) took over
as chairman and managing director, he bought the pilot emoluments on par
with emoluments other airlines, thereby successfully controlling the exodus.
In 1994, the IA unions opposed the re-employment of pilots who had left IA
to join private carriers and the employment of superannuated fliers on
contract.
Sen averted a crisis by creating Alliance Air, a subsidiary airline company
where the re-employed people were utilized. He was also instrumental in
effecting substantial wage hikes for the employees. The extra financial
burden on the airline caused by these measures was met by resorting to a 10%
annual hike in fares. (Refer Table I)
TABLE I - IMPACT OF STAFF COST HIKE IN FARE INCREASE
TABLE III - A COMPARISON OF VARIOUS AIRLINES
TROUBLED SKIES
[1]
These engineers were already earning Rs 60,000 per month, excluding perks.
[2]
The government claimed that Mody had failed to turn IA around.
It appointed a seven-member committee under the chairmanship of Vijay Kelkar,
the then petroleum secretary to make suggestions regarding turnaround. In
its report submitted in November 1996, the committee declared that IA's
losses were caused by factors that were beyond the control of IA. It
recommended that the government provide substantial financial aid to the
carrier and revamp its fleet. This report was later evaluated by P.S.Brar,
the joint Comptroller General of Accounts in the Department of Expenditure
of the Finance Ministry. Brar severely criticized the Kelkar
recommendations, saying that any money given to IA would ‘go down the drain'and IA said that had to go for massive cost-cutting and human resource
management initiatives if it wanted to get back on the tracks. The
hard-hitting Brar report received criticism from IA and Kelkar's supporters.
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