Summer has become synonymous with strike for national carrier Air India (AI), at least since the past three years. Interestingly, the duration of the strike has increased every year, causing a cumulative revenue loss of over R500 crore to the airline. In 2010, a few days after the Mangalore air crash on May 22, the Air Corporation Employees? Union (ACEU), one of the employee unions of the airline, went on strike against a ?gag order? that prevented them from publicly giving their views about the airline.
Though the strike lasted only two days, after the Delhi high court said it was illegal, the carrier had to cancel over 70 flights and suffered a revenue loss of around R15 crore. The strike also disrupted international flights to destinations like Singapore, Kathmandu, Dubai, Muscat and Abu Dhabi. The airline had dismissed 17 officials, including union leaders, and suspended 15 engineers then.
In 2011, about 800 pilots of Indian Commercial Pilots? Association (ICPA), the union of erstwhile Indian Airlines pilots, went on strike in the last week of April, demanding pay parity with erstwhile Air India pilots and better working conditions. The AI management had declared the strike illegal and de-recognised the union. The strike went on for ten days and was called off only after the government agreed to reinstate sacked and suspended pilots and restored recognition to the union. The losses from the strike were over R200 crore.
The recent one this May, by the Indian Pilots’ Guild (IPG), has already entered the 19th day on Saturday and estimated losses have reached around R300 crore. The main reason for the strike this time is again the discontent of erstwhile Air India pilots over their career progression. While the agitating employees agree that the strike is not a good option to sort out issues, they do not see any other option as well. ?They force us to take such step. We do not want to make any move that would hit the airline. However, what do we do if our voices are not heard?? argued a pilot from IPG.
While the AI management and pilots wait for who blinks first, rival airlines, including Jet Airways, Kingfisher and other international airlines, are lapping up AI’s share of passengers during the strike period. Summer being the peak time for holiday travellers, the reduction in AI?s flight capacity has given other carriers a good business opportunity not just to have better seat load factor, but also better pricing. Most airlines, which as it is enjoy a load factor of around 80% or more during summer, are now seeing their flights going almost full.
?Usually the load factors are always good during summer. At the moment, over 90% seats are booked. People who had planned to fly AI earlier are forced to opt for other airlines,? says an airline official.
The Centre for Asia-Pacific Aviation (CAPA) has also estimated that the troubles being faced by Air India would have positives for other carriers, especially for Jet Airways. ?The dramatic contraction of Kingfisher from 66 to 16 operational aircraft, half of which are regional turboprop ATRs, and the pilots’ strike hitting Air India’s long-haul global operations, has left the domestic and international business market open for Jet Airways,? CAPA has said in its latest analysis, titled India Outlook 2012-13. It expects India’s airlines to post a combined loss of a whopping $1.4 billion, with Air India likely to be the ?worst performer?, reporting a loss of almost the entire amount of $1.3 billion.
The domestic capacity in the airline market is expected to grow at 7-8% in 2012-13, while the air traffic in the local market will grow at around 15%. Domestic airlines are expected to add around 24 aircraft this year.
