LONDON – Tensions at national carrier Air India (AI) have continued over the airline’s recent steps to cut costs in the wake of the COVID-19 pandemic.
The carrier had recently just announced it would be implementing the voluntary Leave without Pay (LWP) scheme for employees.
This would essentially furlough staff without any entitlement to wages as well as being able to slash some employee’s wages by 60%.
Position from ICPA
The Indian Commercial Pilots Association (ICPA), the body which represents pilots within Air India accused these moves as illegal.
“Any unilateral change by Air India from agreed-upon wage settlement would be illegal and not be in the interest of our national carrier at this crucial juncture. Such a situation has the potential to flare to an unprecedented magnitude”.
The LWP scheme would enable Air India to place employees on unpaid furlough for periods between six months to two years, and can be extendable by up to five years as well.
The Indian government insisted that it is in talks with the pilot body over these moves, with the ICPA refuting such claims.
“In the press conference by Civil Aviation Minister Hardeep Singh Puri on 16 July, you had stated ‘we are in negotiation with the pilots’ which is far from reality”.
“It was not a negotiation, but the diktat of MoCA (Ministry of Civil Aviation) which was conveyed to us. We would also like to place on record that the so-called negotiation was ‘not harmonious’ in any aspect”, the association added.
Members of Parliament (MPs) on the opposition benches have joined forces to deem this program as “inhuman”, with the Government hitting back stating that the cause was pursued by a famous journalist or just the one MP.
The carrier is incurring significant arrears already even before the Coronavirus pandemic wreaked havoc on the Indian economy.
For many years, the government have been looking for buyers to take the airline over, but this has proven to be difficult.
This especially as a result that as of March 2019, cumulative debt at the carrier is at over US$8bn.
Work Ahead for the Government
During the buy-out processes, the government has tried seven times, the latest attempt happening last month, to hand over 100% equity share capital that it owns to a private buyer.
If anything, it does not come as much surprise about such arrears, as it has been widely reported on by the media and beyond.
The government indeed has its work cut out, as it aims to make the cuts it absolutely needs to, while at the same time trying not to alienate its workers.
It will be interesting to see whether the Indian government makes any changes or whether it will continue with these cuts in the benefit of maybe acquiring a buyer some time down the line.