Tata-Owned Air India Faces Its Toughest Challenge Yet

The Tata Group took over the reins of the beleaguered Air India from the government over 15 months ago, and all the efforts to turnaround the airline’s fortunes were implemented without many hiccups. That is until it changed policies for its workforce, or more specifically, the pilots.

Till now, the Tata Group's five-year transformation plan for the airline—Vihaan.AI—under which it placed a historic order of 470 aircraft, committed $400 million to completely refurbish existing aircraft, and $200 million for overhaul of information technology systems was taxiing smoothly.

But the 'take-off' or the second phase of the transformation plan is facing turbulence, as the airline seems to have missed a trick or two while offering new contracts to the pilots, who allege the latest terms and conditions favour the company, by forcing them to agree to open-ended clauses.

“We are objecting to the terms and conditions of the contract, which leaves space for the airline to amend and change the clauses in future. What are my entitlements, rights and leave policy?” a union representative told BQ Prime.

The two unions—Indian Pilots’ Guild and Indian Commercial Pilots’ Association—claim to represent more than 1,000 pilots out of the nearly 1,800 pilots with the airline.

The unions say that earlier the management said the promotions will be based on merit, but when the actual contracts were offered, it was all based on seniority—offering pilots with more than four years of experience, management duties.

Protesting the new terms and conditions, the Indian Commercial Pilots’ Association sent a legal notice dated April 21 to Air India’s Chief Human Resources Officer Suresh Dutt Tripathi.

“Air India, in its proposed revised terms and conditions of service, has ‘declared’ that all commanders with merely 4 years seniority in Air India will be ‘promoted’ as ‘Senior Commanders’, which is an ‘Executive Role’,” the notice said.

The so-called ‘promotion’ is merely smokescreen to remove the union’s members from the category of ‘workmen’, and consequently from the protection of all labour law, and therefore, is utterly illegal and cannot be foisted on them unilaterally, it said.

The union members feel they are being forcibly promoted to management cadre, even if they wish to retain the present designations and roles.

“90% or nearly 900 pilots of the union qualify for ‘promotion’ to management duties, but there aren’t as many roles available. This move is just to ensure that you become part of the management, so you can’t be a union member,” the representative said.

Air India did not respond to queries sent via email, at the time of publishing this report.

The unions also highlighted that they will essentially get lower compensation, as there is no concept of getting paid when you are not actually flying.

While most of the pilots were flying more than 70 hours a month just a few months ago, now they are being guaranteed 40 hours of flying with no assurance of what they will get over and above it.

“Every year, there are training sessions that pilots must go through. What if that’s not counted under flying or what about when I go on leave for 15 days in a month, I’ll get only 20 hours to fly?” an Air India pilot said, on the condition of anonymity.

While Air India claims that hourly rates for above 40-hour threshold have been increased, the rest of the airlines continue to offer fixed flying hours, which are higher than 40 and up to 70 hours—ensuring higher pay for their pilots.

Even pilots working with Vistara, an airline that is under the process of getting merged with Air India, continue to enjoy better pay structure than what’s being offered to Air India pilots currently, a union member said, on the condition of anonymity.

According to the union representative, as a result of this, many pilots are planning to leave, with a few already having tendered resignations. "Close to 50 pilots have tendered resignation even at Vistara, fearing worse pay once the merger goes through,” the union representative said.

BQ Prime couldn’t independently verify the number of resignations.

The Tata Group is looking to restore the glory days of Air India over the next few years, but the approach towards its pilots has come under question.

“Their attitude towards the people doesn’t give impression of an Air India run by Tatas, rather an airline run by Singapore Airlines. The management style we see is reflective of how things are run at Vistara,” said Mark Martin, founder and chief executive officer at the aviation consultancy Martin Consulting.

The Tatas are extremely people-oriented, they are not at loggerheads with people but are keen on efficiency, as has been seen in their approach at other group companies over the years, he said.

The unions also wrote a letter, titled Requesting to Preserve the Legacy, to Ratan Tata, the chairman emeritus of the group’s flagship company Tata Sons Ltd.

“We feel that we are not being treated with the respect and dignity that we deserve as employees of Air India. As a result, our morale is low, and we are concerned that this will have a negative impact on our ability to perform our duties to the best of our abilities,” the letter said.

Recently, the company reportedly said in an internal email that most of the pilots have accepted the new contracts. However, another report stated that the company held a townhall meeting to meet with pilots who are yet to accept the new conditions.

In a letter written to members, the unions said, “Do not give any credence to the claims by the management that most of the pilots have signed this new agreement. This is a transparent attempt by their PR machine to try and sow doubt and confusion.”

At a time when there’s widespread discussion of a shortage of pilots globally and with the airline’s own pilots adamant on their stance, Air India has found itself in a fix. However, Go First’s bankruptcy may help the grand old airline somewhat in the short-term.

There seems to be scope for discussion, as the townhall meeting indicated. Air India would certainly look to resolve the situation quickly and continue on its transformation path, which is being dubbed as the most challenging turnaround in aviation history.

At the other end, the pilots are hoping to emerge better off from the conditions they are facing currently. The two trajectories do not seem to converge as of now.