Globally strikes are synonymous with semi-skilled workers either wanting a pay hike or having general disagreement with the management over a new contract document. In a stark contrast to this explanation, over 600 pilots from Jet Airways, country?s largest private airline went on mass ?sick leave? for four days taking the country by unpleasant surprise.
Highly skilled pilots with salaries running in lakhs used collective power to force the management to re-instate two seniors who were trying to get their nascent union called National Aviators Guild (NAG) recognised but the airline got jittery about the move. Perhaps the airline took cue from instances where even profitable companies have doomed due to strong unionism. For instance, in 1982, 2,50,000 workers went on strike under the aegis of Dutta Samant and more than 50 mills were shut in the then Bombay for being deprived of wage hikes.
The ?mass protest? by pilots is not confined to Jet alone; the industry will also have a negative impact financially at a time when the sector is flying in the black. Say an industry insider, ?Due to the pilots stir, international investors might look at the sector not conducive for investment. Investors might have an impression that the Indian aviation is unstable and the investors might not get attractive returns due to such events.? He further adds,? Due to the magnum opus scale of the strike leading to cancellations of over 100 international flights, the strike grabbed headline in international media too.?
Given that private carriers such as Kingfisher Airlines, GoAir and national carrier Air India are looking at infusing equity in their respective carriers, the plan could hit a rough patch. The strike can influence pilots from other private air carriers to form a union as well. Generally, when on a strike, workers go without pay or take actions which provoke them to form a union as is allowed by the law of the land. But in the case of Jet, two pilots were sacked by the management for forming a union and the peers of the sacked employees did not accept the unceremonious exit of their colleagues. Despite Mumbai?s labour commissioner asking pilots not to strike when the conciliatory proceedings were on between NAG and the airline?s management under the aegis of the labour commissioner, pilots did not take into consideration the request by the commissioner and resorted to a strike.
The mass protest by pilots hit the management of the airline where it hurts most. The revenues generated by the sale of tickets dipped significantly to Rs 10 crore a day against Rs 30 crore earned by the carrier before the strike. Not only this, the carrier might find it difficult to raise funds from the capital markets against the backdrop of the strike which projects the airline as an unstable organisation. The issue does not only revolve around the financial losses that Jet has to monitor at a time when it is already reeling under losses of Rs 225 crore for the quarter ending June 30, 2009.
There have been instances worldwide where strikes by pilots have been averted following an intervention by either the government bodies or conciliatory authorities. In 1999, Cathay Pacific Airways Ltd and its pilots? union reached a last-minute agreement, averting a possible strike after the pilots accepted nearly all the airline?s major demands. Cathay had been forced to cancel hundreds of flights after pilots began calling in sick for nearly two weeks, but had partially recovered by chartering from other airlines. That time, analysts had said Cathay had appeared well prepared to go through with its decision to fire flight crew who did not accept a new contract offered to them. In the end, nine weeks after negotiations, some of the best-compensated pilots in the world were expected to agree to pay cuts of as much as 22% over three years in exchange for stock options.
In yet another example in 1999, a chunk of pilots at American Airlines called in sick and were ordered by a federal judge to be back at work. The aggrieved pilots resorted to a sick leave because federal law makes it very difficult for railway and airline employees to strike. Under the Railway Labour Act in the US, airline employees must participate in a lengthy mediation process designed to force a resolution before they can strike. If mediation fails, the president may order a 60-day cooling-off period ? during which airline workers must return to work? if he feels a strike would substantially disrupt the national transportation system. This is what happened to American Airlines pilots two years ago: President Clinton ordered the cooling-off period four minutes after they went on strike, and they were forced to accept the settlement.
In February 2008, British Airways (BA) pilots stepped back from a possible strike when union officials and airline executives agreed to enter mediation to resolve their dispute over pay and benefits at OpenSkies, BA?s new subsidiary. The union said that 86% of its members had voted to strike in response to the launch of the lower-cost subsidiary. In January 2008, BA had announced plans to start OpenSkies with a single plane, with the goal of adding a second within six months. The average BA pilot makes about $117,000 a year, while OpenSkies? pilots would earn about 25% less, BA Pilots Association, which represented about 3,000 BA pilots feared that executives could use the lower pay at OpenSkies as leverage to eventually reduce BA pilots? pay.
What is shocking in Jet?s case is that pilots resorted to a strike even when conciliatory talks were on under the aegis of the labour commissioner of Mumbai. Even the Bombay High Court issued a contempt of court notice. A loud and clear message that millions of passengers want to give to Jet pilots is that a strike should not be considered as a ?right only? in a democracy. Legitimate demands of workers can be met through forums like the labour ministry and welfare associations.