Strikes In Airline Industry

Strikes in airline industry

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In unrelated strikes a fortnight apart, commercial pilots caused Jet Airways and the already beleaguered Air India to grind to a near complete halt leading to flight cancellations, leaving irate passengers stranded across the country from New Delhi to Port Blair

Jet airways strike 

In July-end, Jet Airways terminated the services of two senior pilots — Sam Thomas and D Balaraman — without giving any reason for the same

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They claimed it was just a guild. (national aviators guild)

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Registered with the labour commissioner's office

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NAG has the support of over 650 pilots of 1000 pilots on roll.

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Any strike by the pilots during this pendency of conciliation would be deemed an illegal act as per the Industrial Disputes Act

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To avoid the penalties, the pilots went on mass casual leave to hamper operations.

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Two more pilots were sacked as the protest action began.

☺ But in the end, Over 400 pilots, who reported "sick“, decided to resume their duties after a nine-hour-long meeting with the airlines management in Mumbai on 12th night. During the marathon meeting, which ended at around 2.30 am, the airline management and the agitators reached a settlement - - four sacked pilots were to be reinstated 

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- a consultative group made up of the two sides formed to resolve all issues. On the other hand the pilots decided that they would not challenge the review of registration of their union.

☺ Jet airways the airlines which leads the aviation pack by with a 26% market share went into a loss of Rs. 100 crore due to the strike ☺

Air India strike v The rancor at Air India began on September 24,2009 when the management decided to slash the allowances given to nearly 200 senior pilots. v The cuts in the productivity linked incentives (PLI) would reduce the salary by 20 to 50% and save Rs. 800 crore for the airline. v The pilots called in sick for over five days, causing some 400 flight cancellations, long delays, and a temporary freeze in bookings v

v Reason v Loss faced by the airline is Rs. 7000 crore and annual deficit of Rs. 5000 crore. v The airline is looking for a Rs. 5000 crorebailout package from the government but on the condition that it first cuts costs. v But the pilots are of the view that no company can be turned around simply by cutting employees salaries and there are other things to concentrate on like fuel guzzling aircrafts and the ground handling charges which are so high as it has been outsourced to a private agency.

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v Pilots also demands that management sacks the 125 expatriate pilots who are being paid as much as $ 20,000 per month even when 31,000 Indian employees were not since July. v On the other hand management of the airline is of the view that Air India’s employee costs are Rs. 3300 crore of which the PLI’s make up Rs. 1500 crore and the allowances alone were 260% of the salary. v v

SALARY  Pilots

Minimum

Maximum

PLI

Min. + PLI

Max.+PLI

Director 

67,785

78,695

496085

563870

574780

GM

59,998

73,636

484835

544833

558471

Dy. GM

54,951

64,611

473585

528536

538196

Commander

48,128

52,056

386335

434463

438391

Captain

34,188

36,688

250935

285123

287623

First officer

27,749

32,285

171595

201344

203880

Pilot’s incentives rising despite of declining profits 2005-06

2006-07

2007-08

2008-09

Revenue

14,600

14,425

13,519

14,325

Operating profits

(333)

(1,815)

4,216

3,149

1,107

1,321

1,414

PLI and Flying Allowances 1,072

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What is the pilot’s contribution towards Air India’s turnaround?

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Strike was resolved after 5 days, the airline has since paid the dues and has agreed to discuss any cuts in PLI with the committee of executive pilots.

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The disputed performance-linked pay cuts of up to 50 percent have not been ruled out but will not be implemented until they are further discussed with employees.

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Air India which has just 17% of the market share, lost over Rs. 110 crore due to the strike.

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Position in India 

In India unlike America right to strike is not expressly recognized by the law. The trade union Act, 1926 for the first time provided limited right to strike by legalizing certain activities of a registered trade union in furtherance of a trade dispute which otherwise breach of common economic law. Now days a right to strike is recognized only to limited extent permissible under the limits laid down by the law itself, as a legitimate weapon of Trade Unions.

Provision of valid strike under the Industrial Dispute Act, 1947Section 2(q) of said Act defines the term strike, it says, "strike" means a cassation of work by a body of persons employed in any industry acting in combination, or a concerted refusal, or a refusal, under a common understanding of any number of persons who are or have been so employed to continue to work or accept employment. Whenever employees want to go on strike they have to follow the procedure provided by the Act otherwise there strike deemed to be an illegal strike. Section 22(1) of the Industrial Dispute Act, 1947 put certain prohibitions on the right to strike. It provides that no person employed in public utility service shall go on strike in breach of contract: (a) Without giving to employer notice of strike with in six weeks before striking; or (b) Within fourteen days of giving such notice; or (c) Before the expiry of the date of strike specified in any such notice as aforesaid; or (d) During the pendency of any conciliation proceedings before a conciliation officer and seven days after the conclusion of such proceedings.

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Politics Political intervention is common, with unions generally affiliated to major parties and leaders often taking the side of striking workers to protect their vote base.

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Repercussions Experts say the archaic labour laws will hurt businesses, unless the government overhauls them to also protect employers. If strikes such as this one drag on or are replicated in other sectors such as IT and export-processing units, they could have a negative effect on foreign investment in India, experts say.

 It must be considered: with the airline barely aloft amidst the worst crisis in the industry history, the idea of creating an union, a good thing by itself, but it's at the wrong time, wrong place and by the wrong people... It's very likely that their terrible mistake will kill their company and jobs. It happened many times in the past and seems that nobody learn the lesson. Hopefully they realize this before is too late.

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is not a strike, they have taken casual leave. This is permitted for 2 days under Indian law and guess what they get paid for it under Indian Law. If they wanted to stand up for what they believe they should also have the guts to go on strike instead of taking such an escapist and disruptive route. Give ample notice allow company to plan and respond and do it in a civilized manner.

Effects v Goodwill of the company: Ø Employees Ø Public 

v Financial losses v