Air India remains in holding pattern

Financial position of government-owned airline worsens as 46-day pilots' strike results in lost revenues of 5 billion rupees (Dh327m).

NEW DELHI // The position of Air India, India's government-owned airline, is growing more precarious, with a 46-day pilots' strike resulting in lost revenues of 5 billion rupees (Dh327 million).

The strike began on May 7, when nearly 400 pilots belonging to the Indian Pilots' Guild union called in sick. They were protesting against the management's decision to allow pilots of the erstwhile Indian Airlines to fly the company's new Boeing 787 Dreamliner fleet.

Indian Airlines, which was a government-owned domestic airline, was merged with the flag carrier Air India brand in 2007. But rancour between pilots from the two companies has hindered the airline.

The striking pilots, all hired by Air India before the merger, have argued that since the purchase orders for the 27 Dreamliners were issued before the merger, only longtime Air India pilots should fly these aircraft on their prestigious routes.

The stand-off has compounded the woes of Air India which - like another state-owned transport company, the Indian Railways - finds itself in a troubling financial situation, due to political interference in its operations.

The mismanagement of Air India has also provided further ammunition for opposition parties to attack the ruling United Progressive Alliance government, whose image has already been tarnished by several corruption scandals over the last two years.

Air India has fired 101 of these striking pilots, derecognised the Indian Pilots' Guild, and cut back its international flights, running only 38 of its 45 flights per day. The airline plans to reinstate some of its suspended routes to east Asia starting from Sunday.

The roots of the strike can be traced back to the different training systems at Air India and Indian Airlines before their merger, said Jitender Bhargava, a former executive director of Air India.

"In Indian Airlines, a person got commander training in five to six years, whereas in Air India, it took 10 years," Mr Bhargava said. "And now after the merger, you have a situation where a pilot who joined Indian Airlines in October 2005 has already become a commander, whereas a pilot who joined Air India in February 2003 has not yet become commander."

Putting such pilots together into the cockpit of a Dreamliner would, Mr Bhargava said, "create clashes in seniority, which is not desirable from a safety aspect".

But Mohan Ranganathan, a former Air India pilot and a member of the governmental Civil Aviation Safety Advisory Council, said that the demand to fly the Dreamliner was a trivial one.

"The reason the Indian Pilots' Guild is objecting to this move is because it blocks the career paths of a lot of co-pilots in Air India, many of whom are sons and daughters of senior Air India pilots," Mr Ranganathan said.

"They are being selfish, and they're being misled by their leaders into thinking that by going on strike, they can bring Air India down on its knees," he added.

The pilots' strike is only a symptom of the much deeper malaise affecting Air India, which has teetered on the edge of bankruptcy for some time.

Last March, the then-civil aviation minister, Vayalar Ravi, told the Rajya Sabha, the upper house of India's parliament, that the airline had racked up losses of 133bn rupees since 2007. Its total debt burden stands at 400bn rupees.

Over the last year, Air India employees have repeatedly gone on strike, often for non-payment of wages.

Air India's market share has declined ever since a new clutch of private airlines entered India's airspace in the early 2000s. At present, its market share stands at 16.2 per cent, fourth among domestic airlines, according to data from the Directorate General of Civil Aviation.

Mr Ranganathan said the airline was run by political appointees rather than professionals, and that this interference resulted in "Air India's use as a limousine service for politicians rather than a professional airline."

In mid-April, the government approved a bailout plan for Air India, which would inject 300bn rupees into the airline over the next eight years, restructure its finances, and spin off its maintenance and engineering units.

The bailout has been seen as a desperate effort to pull Air India back from the brink.

"Nobody is going to give any more public money to Air India," the civil aviation minister, Ajit Singh, told journalists at a book release function in Hyderabad last week. "Pilots need to understand that it was in their own interest to revive Air India."

Mr Bhargava noted that passengers and employees were losing faith in the management of Air India. "This is what happens when you leave an airline to be run by bureaucrats with no knowledge of aviation," he said. "You cannot run an airline in theory. There has to be a practical aspect to it."

Both parties - the striking pilots on one side and the management on the other - are holding their ground, protecting their interests and believing themselves to be right, he said.

"But in the process, the two sides are killing this third entity called Air India," he said. "And it is Air India's interests that should be guiding the resolution of this problem."