The delivery of VT-ANH, the first Boeing 787 Dreamliner to be delivered to Air India, has been delayed from an original delivery date of May 25th (last Friday). This delay is due to Air India and Boeing being unable to agree to a compensation package for the 787s, which arrived over 3 years late. The delay had very significant costs for Air India.

Air India’s legal department is looking at how to go about obtaining a fair compensation amount, which Air India’s board has reportedly estimated to be around $800 million.

Air India’s second Boeing 787, VT-AND, is currently scheduled to be delivered on June 12th, although that delivery may also be pushed back if this issue is not resolved.

Editorial note: the author does not endorse this perspective, he is simply explaining it for the purpose of public understanding. This perspective is not officially endorsed by the ICPA, due to a media gag order.

Last week, the perspective of the IPG on the current Air India strike was posted. This week, the perspective of the ICPA, the erstwhile Indian Airlines union, will be posted.

The IPG feels that ICPA pilots should not be permitted to train on the Boeing 787 Dreamliner, because it will significantly and adversely impact their career progression. However, the ICPA pointed out to me that the IPG had actually agreed to allow ICPA pilots to fly on the Dreamliner. I was forwarded a document which contained the minutes of a meeting held on October 08, 2011, signed by IPG captains E Kapadia, J Menon, and Rohan Singh. It states that the IPG would be open to ICPA pilots flying on the 787 provided some conditions were met. These conditions included movement of IPG pilots deputed to fly on Air India Express, and for IPG to be allowed to fly on A320 aircraft which the ICPA currently operates. While the management did not fulfill these conditions, the ICPA does not feel that it is responsible for the management’s shortcomings.

In addition, the ICPA pointed out that the courts have ruled that Air India management is within its rights to allow the ICPA pilots to fly on the 787. They don’t feel that any more justification is necessary, and that the strike is therefore unjustified.

The ICPA also feels that the IPG’s argument that training ICPA pilots on the 787 is more costly and will take longer is overstated.

“I joined Indian Airlines endorsed on the Boeing 737, and many of my seniors are experienced on Boeing aircraft,” an ICPA office bearer said. “The costs of training given by my IPG counterpart are grossly inflated.”

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Secondly, they pointed out that the merger was not by their choice. They note that before the merger, they were working for a profitable company which paid salaries on time. That cannot be said about the post-merger Air India. However, they respect that the government owns the company, and therefore has the right to do what it wants with the company. They feel that now that the merger has gone so far, 100% integration will be necessary.

“These are normal HR integration problems,” said a senior ICPA Captain. “We must move forward and get them out of the way so that the company can improve.”

The ICPA feels that maintaining two separate verticals is only a short term solution, unlike the IPG which feels that it is a good permanent solution. The ICPA feels that having a single contract, flight duty limitations, rest period, seniority list, etc. are important to move the company forward.

“We hope to make Air India profitable once again,” said an ICPA office bearer. “Just like everyone else, we are taxpayers too. It is important that we create an airline that every Indian can be proud of, without hurting the bank.”

Editorial note: the author does not endorse this perspective, he is simply explaining it for the purpose of public understanding.

As everyone surely is aware by now, the Indian Pilots Guild, Air India’s pre-merger pilot union, is striking right now. What many people do not know is why. Why is the IPG striking?

The mass media was very quick to criticize the IPG. Coming right after a 30,000 crore rupees bailout package was passed, inconveniencing thousands of passengers, and costing Air India 10 or 20 crores a day (not to mention brand damage), this strike was definitely a nuclear option. The IPG pilots not only feel that this strike was justified, they also feel that their perspective and requests are being trivialized.

“There are a lot of legitimate complaints we have. [Minister of Civil Aviation] Ajit Singh has said as much,” said a striking IPG first officer who declined to be named. “Even after saying this, the management and government are doing nothing, and the media, which doesn’t understand the whole story, continues to blast our positions.”

The first complaint that the IPG has concerns Boeing 787 Dreamliner training. The IPG feels that only they should be permitted to fly these state-of-the-art aircraft, ordered by erstwhile Air India. Management feels that the aircraft should be divided on a 1:1 basis between the IPG and the ICPA, erstwhile Indian Airlines’ trade union. The media was quick to criticize this demand, calling the union greedy and selfish. From a layperson’s view, the management seems to make sense – this is a new state-of-the-art aircraft, and all pilots in the merged company should have a chance to fly it.

However, IPG doesn’t see it that way. Air India took delivery of all the new aircraft ordered for Indian Airlines. In addition to taking delivery of these aircraft, Air India also recruited more than enough pilots – in fact, Indian has far more commanders (Captains) than Air India does, because commander upgrades are done within 4 or 5 years, and are time-based instead of requirement-based. Time-based upgrade policy means that no matter what, after a set period of time, the pilot will get upgraded. In comparison, requirement-based policy means that upgrades will only occur if there is requirement for another commander. Air India pays ICPA commanders higher salaries than first officers, at the expense of the company, despite the fact that these commanders are not necessary. With all the aircraft delivered, Indian Airlines has roughly 800 pilots operating 66 aircraft.

In comparison, despite hiring enough pilots to operate all 50 aircraft ordered for erstwhile AI, the IPG only flies 22 aircraft. Since Air India pilots get upgraded to commander at a later stage than their Indian Airlines counterparts, and their contract only allows them to upgrade if there is the necessity for a commander, operating less jets than expected is a severe hit to young IPG pilots’ career progression.

The IPG feels that the management’s decision to let Indian Airlines commanders also fly the 787 is because the executive directors are Indian Airlines staff, who favor pilots of “their own airline” at the direct expense of IPG members. In addition, since Indian Airlines will produce commanders whether the combined company needs them or not, while erstwhile Air India pilots will not be upgraded unless there are actual aircraft for them to fly, it makes sense to management to send ICPA members to train for the 787. Whether or not AI management has enough sense to realize the latter reasoning is up for debate though.

While some IPG pilots that I’ve communicated with concede that while Air India is losing money, and it does make sense to the management to try to save money, this is not an appropriate way. There are many ways to cut costs that do not affect pilot pay or benefits, and they listed many in a press release.  They are very unhappy about it for obvious reasons – they make less money, have less flexibility, and lose other advantages of working for Air India that they thought they had. Not only this, but the IPG claims that management is flouting promises made shortly after the merger took place.

I was forwarded an excerpt of the Wage Agreement of 2007, which clearly states:

Till such time the induction of twelve B787 aircraft in the fleet is completed, the conversion of Commanders onto B787 will be as per line seniority from B747-400/B777/A310.

The IPG cite this as a promise that they would get to operate the first 12 Boeing 787 Dreamliner aircraft. They also claim that this clause was never amended. As the facts stand, not honoring this promise will adversely affect hundreds of IPG pilots.

IPG also says that training ICPA pilots to fly the 787, who until now had not flown any Boeing, will take much more time and will cost significantly more than training IPG pilots to do the same job, since IPG pilots already operate 22 Boeing jets. The cost of training ICPA pilots is 1 crore, compared to a mere 30 lakhs for IPG pilots.

IPG pilots’ career advancement is further negatively affected by Air India management’s plan to lease out 7-10 Boeing 747s and 777s.

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Apart from 787 training, the IPG have other complaints as well. They complain that the management is not following their own policies by allowing them first class travel during “transhipment.” This has been criticized a lot by the media – they feel that this is another example of the IPG’s greed.

However, the IPG was able to to provide me with Page 2-28 of their Operations Manual (Part A). This is a document that the management itself filed. This document was also approved by the DGCA. Sure enough, the excerpt clearly says:

Transhipment means positioning of a crew member by Air India or other carriers, or also by road or water to undertake flight duties or after having undertaken flight duties.

(i) Crew scheduling will be planned in such a manner that transhipment of Crew from one station to another will be avoided as far as possible. Transhipment by other carriers, when necessary, will be by the highest class, by IATA member carrier using multi-engine modern aircraft. This will be counted towards total hours of duty.

(ii) All transhipment on Company flights will be by First Class, unless all the First Class seats are sold to genuine full fare paying First Class passengers and Directors and above of the Company on duty. In case of downgrading, relevant First Class passengers manifest will be provided on  demand.

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Apart from 787 training, the IPG have other complaints too. They complain that the ICPA’s contract is significantly better, as a result of the strikes they conducted last year. They have in fact gone as far as to say that they took inspiration from the ICPA.

When Air India and Indian Airlines were separate, the contracts were very different, and pilots chose which airline they wanted based on these contracts. Air India pilots got higher salary, and they got to fly widebody jets. In comparison, Indian Airlines pilots got more time off from work, and much faster (time-based) promotions.

During the strike last year, ICPA pilots were given a pay raise (to reach “pay parity”) without having to sacrifice their extra time off. In addition, they are now being able to fly the 787, a widebody jet.

IPG feels that they should be given more time off, along with time based promotions, so that their contract is in line with the ICPA contract.  The government agreed to promote pilots to captains after 8 years (compared to 4-5 years for Indian Airlines pilots), but the government refused to pay the additional salary that comes with “commander” position. The IPG found this unacceptable, and this is the issue which lead to breakdown of talks.

There are other ways in which IPG pilots are disadvantaged. Their contract penalizes them from availing of their sick leave or casual leave. This can be a cost to the pilot over over 10% of their monthly allowances. This results in pilots utilizing less sick leave (and personal leave) than they have credit for. This disincentive is also potentially dangerous – encouraging pilots to fly even when they are not in fit shape to fly. It makes perfect sense to repeal this clause and find a new way to deal with medical and personal leave instead.

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The question everybody is asking right now is  – what should happen next? The IPG is willing to talk to the management and the civil aviation ministry. The management, on the other hand, is refusing to talk, instead demanding that the pilots return to work. The IPG is not willing to do this until the 70+ sacked pilots are reinstated.

Until talks begin, there is no end in sight for this impasse. The airline will continue to lose crores of money (albeit less now that their contingency plans have kicked in), and pilots will still not have been paid their salaries. It is in the best interest of pilots, the government, and Air India for talks to occur as soon as possible.

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Finally, the last question is – what does the IPG think should happen in the long run? The IPG is advocating a single holding company with 2 separate verticals would be ideal. This arrangement would allow management and operational synergies to be availed of and create a seamless experience and brand for passengers, but also get rid of the Human Resources disaster of this merger.

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According to the IPG, the media has been unfair to their views, and not allowed the public to understand it properly. Hopefully you have a better idea of their positions now.

Editorial note: the author does not endorse this perspective, he is simply explaining it for the purpose of public understanding. Stay tuned for Air India Strike: Management Perspective, and Air India Strike: ICPA Perspective. Coming soon!

You may not have heard, but Air India’s pilots have been bickering for some time. They are split into two unions, the Indian Pilots Guild (IPG) which is made up of pre-merger Air India pilots, and the Indian Commercial Pilots Association (ICPA) which represents the pre-merger Indian Airlines pilots.

The IPG felt that Air India should only train IPG pilots on the new state-of-the-art Boeing 787s that Air India is receiving, because pre-merger Air India ordered the 787s. In comparison, the ICPA felt that an equal number of ICPA and IPG pilots should fly the 787s. The management agreed with the ICPA, because they felt that it is a fairer way. There has been a few court battles, and both unions were trying to negotiate with management. A few weeks ago, the enmity got so bad that some IPG pilots faked sick so that a flight carrying ICPA pilots to 787 training would get cancelled. The pilots arrived a day late to training.

The courts sided with management and the ICPA. Yesterday, talks broke down between the IPG and management. Ignoring all rules regulating how strikes are to be carried out, the IPG held a “sick-out” yesterday evening, with almost 160 pilots reporting sick. 10 longhaul flights were cancelled. Today, more pilots were planning to report in sick, but AI’s management did something commendable. They fought back.

Aviation minister Ajit Singh declared the strike “illegal” -  he said, “There are certain ways of even going on strike. The pilots may have grievances but they should have spoken to the management, me, other well wishers” to the press. Air India sacked 10 pilots who were found to be in good health after reporting sick, and took the politically dangerous decision of derecognizing the IPG, even though the union is backed by the Nationalist Congress Party. For those who find it difficult to keep track of all the various political parties (like me), the NCP is former Aviation Minister Praful Patel’s party.

Air India demanded that all pilots report to work this evening. They sent doctors to the homes of the 160 “sick” pilots to verify that they are actually ill. Those who are found to be in good health and don’t report to work tonight will be sacked effective immediately.

Air India has enough problems on its own without having to worry about undisciplined pilots with unreasonable demands. It’s good that management and the MoCA is taking a strong stance, instead of just giving in to the IPG’s demands and setting precedent for the future.