As a strike by pilots entered its ninth day, the government admitted that the 2007 merger of Air India with Indian Airlines is faltering.
“In retrospect, the merger of Air India and Indian Airlines was not right. Progressive integration of schedules and human resources issues were not addressed. But merger was a right decision at that point of time,” said Aviation Minister Ajit Singh May 16.
These problems, however, have resulted in a sick-out that has now spread to more than 300 pilots of the Indian Pilots Guild (IPG), who are protesting the company’s decision to train pilots from Indian Airlines’ ranks for the 27 newaircraft due to join the carrier’s fleet.
IPG’s members argue that this decision hinders their career prospects, and they demand that 787 training be restricted to Air India’s legacy pilots, who are used to operating the airline’s international routes.
“The airline management has no comprehensive policy for career progression of the pilots since the merger of Air India and Indian Airlines took place in 2007,” says IPG leader Tauseef Mukaddam.
Singh acknowledges the issue, noting that “lots of synergies were expected. The two companies that were merged have very different cultures. Human resources issues are still open and are contentious.”
He adds, “What I understand is about 70% of the merger process in areas like IT, accounting, flight codes and marketing are complete. Now 30% of the merger, mainly on HR issues, is left, and we are implementing the Dharmadhikari Committee report for that.
“There will be more problems in the way ... We need to be firm and patient,” continues the cabinet minister.
After the 2007 merger the government established a panel headed by former Supreme Court judge D.M. Dharmadhikar, to develop a plan to integrate and harmonize the wages of about 30,000 employees. The committee submitted its report in January 2012 to the minister of civil aviation.
This is not the first labor action related to the integration; pilots from Indian Airlines, who operate domestic flights, resorted to a 10-day strike shortly after the formation of the Dharmadhikari Committee in 2011, demanding parity with the Air India pilots assigned to international flights.
Separately, Air India is selling its current freighter fleet and canceling plans to build a cargo facility in a western state as shrinking cargo traffic and poor economic conditions diminish returns from the operation.
Singh says the decision to sell the six converted-200s is also attributed to the lack of a proper distribution network and mismanagement. Moreover, Air India’s cargo aircraft are too big for domestic operations and too small for international ones, he adds.
Until now, enhancing the air cargo business was a core part of Air India’s revival plan, and 40 aircraft were to be converted or reconfigured. It is unclear how this latest development affects that plan.