It is a bit poignant that I have to write about airlines on 9/11 when ground zero is in mourning. Barely some five months ago, Rajya Sabha MP P V Abdul Wahab from Kerala was accused of calling the pilot of an Air India aircraft a ‘glorified driver’. What followed was such a hue and cry and the privileged passenger was forced to disembark. The same community is now seeking to be included under the definition of “workman” under the Industrial Disputes Act 1947 and fighting for their right to be part of an organised trade union that was the bane of the US Airline Industry.
The strike is now on for many days and even as I write this some 260 domestic and 21 international flights are cancelled every day causing untold miseries to paying passengers. The airline is also reported to be losing revenue to the tune of US $ 5 million a day and certainly a whole lot other businesses that thrive on the sidelines are also badly affected. There are close to 13,000 employees who earn a livelihood at Jet Airways. On the whole it is affecting the lives of many. A brand like Jet Airways was not built in a day. A lot of hard work has gone into building it into a reliable carrier of repute. And now many people including Jet Airways ground staff are saying that the brand is being mauled and destroyed by a handful of recalcitrant pilots who draw obscene amounts of compensation.
Do these pilots pretending to be “sick” know that there is an Association Of Unemployed Pilots who has now formed a union called All India Unemployed Pilots Association (UPA). There are around 3,000 trained and jobless pilots possessing commercial pilot’s licence in India and around 150 of them have joined together to form the UPA (not United Progressive Alliance !!) In the days of economic buoyancy several middleclass families in India spent a fortune to get their children to good aviation schools abroad, often borrowing from the banks. All that Jet Airways needs to do is to replace these fat cats with the hungry ones and make sure they don’t get fat.
But then let us not forget that Jet Airways and Kingfisher and many other airlines threatened to strike on 18th August and warned of suspending operations indefinitely unless the government gave them a bailout package for the industry. These private carriers came under the banner of Federation of India Airlines (FIA) and its secretary general, a former civil aviation secretary, arrayed a laundry list of demands/woes. The pilots may have smelled trouble here and to pre-empt receiving any pink slips they may have been forced to take refuge under the Trade Union Act 1926 ( yes 1926 !!)
It is interesting to observe that none of the competing airlines have voiced any concerns and the usually flamboyant and noisy Mr. Mallaya who speaks at the drop of a hat has gone silent. Where is the FIA and its secretary general? Is there a conspiracy here to sink Mr. Goyal’s ship?
This businessman from Patiala is no ordinary entrepreneur. He has substantial experience in this industry having worked in various capacities in many Middle East and Arab Airlines including a stint in Philippines Airlines. However, Mr. Goyal, who is not getting younger, could have been endowed with some more circumspection and could certainly use appropriate vocabulary. We have seen his flip flops on the television. He is reported to have called the pilots as terrorists and to do so in the month of September is outright foolish and is not helping the situation. This gentleman Mr. Girish Kaushik, President of the National Aviator’s Guild, the newly formed pilots’ union, is another character whose temper was evident on the television when he spoke to the reporters. There is a saying that fools and madmen ought not to be left in their own company. The government is not willing to intervene like they did when Mr. Goyal inadvertently sacked 1900 of his employees in October 2008, because politicians want to fish in troubled waters. With the state run airline in utter disarray, there must some perverse pleasures in Mr. Goyal’s misery.
In the US, the airline industry is highly unionized. US Airways entered bankruptcy protection in 2002 and again in 2004 whereas United sought protection in late 2002, and Delta and Northwest on the same day in September 2005. These bankruptcies and labour concessions at American, Continental and several other smaller airlines have further hurt labour-management relations. So Mr. Goyal is not throwing some empty threats that he will have to close the airline.
In India, pilot compensation is still not determined by collective bargaining but by opportunity costs. The ability of an airline in India to have an elastic cost structure to meet the uncertainties of competitive product markets and a high level of price competition are stifled by a number of factors particularly volatile fuel bills, heavy government taxes and now a propensity for collective bargaining.
It is important to observe that pay scales for senior pilots at US cargo carriers now sometimes exceed those for the major carriers. It is reported that “some employed passenger pilots, concerned about job security at their current employers, have attempted to “start over” at UPS or FedEx, despite their loss of seniority and a large initial sacrifice in pay”. Something serial entrepreneur and founder of the pioneering low cost airline – Air Deccan – Captain Gopinath may be interested as he is foraying into cargo business.
For Jet Airways, this is not the first time that their pilots have sought refuge under the Industrial Disputes Act. The pilots are still testing waters to push their collective bargaining powers to the hilt. As early as December 2007, the Supreme Court had stayed a Bombay High Court Order that had reversed the Labour Commissioner’s Order and said that a pilot is a worker as defined under that Act. Jet Airways in its appeal countered that the senior commanders were pilots-in-command of the aircraft and therefore not workmen as they were completely in command of the entire crew of the aircraft. They also exercised full managerial and supervisory powers with regard to ground personnel, government authorities and even passengers. The pilot in question was drawing a monthly salary of Rs.350, 000 plus many other benefits. The Supreme Court’s final verdict will have a wider ramification to the airline industry in particular and for many other businesses. We have already driven away the Koreans from Chennai who are now making their i20 in Europe. Imagine if this virus were to feed into the BPOs and the IT industry, then India’s goal of an 8% GDP growth for 2010/11 will be a pipe dream.
In the midst of this entire muddle, the consumer – passenger- is paying a heavy price. The other airlines have stealthily increased fares and are fleecing the passengers. But on the flip side many who travel only on Jet and have not had a taste of the low cost airlines will suddenly discover that airlines like Indigo deliver value for money. With the austerity measures proclaimed by the government, will corporate honchos, permanently switch loyalties away from Jet and fly economy on other cheaper airlines. If this happens then it could spell doom for the precarious Jet brand.
Who is responsible for this mess? The Chinese believe that whispered words are heard far. How true. The conspiracy theory has some fodder. In God’s own country, there are no viable business enterprises and someone who dreads to do business there told me that it has also Devil’s own men!! Is it a conspiracy of accidents that the national carrier Air India (less said about it the better) has a union leader in one George Abraham and the dismissed Jet Airways pilot for fomenting trouble is one Sam Thomas!! Food for thought?