A Turbulent Marriage

In fact,when the merger happened on August 27,2007,AI had been profitable for four straight years and IA for three successive years till 2005-6,largely owing to its monopoly over the skies. After the merger,it has been downhill all the way,with the combined entity posting increased losses with every passing year. In the last two years alone,the airline’s operations were disrupted due to five strikes—thrice by pilots and engineers from Air India and twice by pilots from Indian Airlines. The churning at the ground level is matched by uncertainties at the top too. The airline has had four CMDs (chairman & managing director)—all bureaucrats—in the last five years. An attempt to rope in professionals at the helm in 2010 backfired,with four of them shown the door in less than six months.

In a statement issued in Parliament during the course of the ongoing pilots’ strike,Civil Aviation Minister Ajit Singh claimed that nearly 70 per cent of the issues related to integration had been “resolved” and only 30 per cent,those relating to Human Resources (HR),remained. What Singh didn’t say was that the devil lay in this 30 per cent.

On the vexed issue of HR merger,the airline management merged those at the level of Executive Director,General Manager and Deputy General Manager but those below continue to operate as two separate HR lines,with different policies governing pay scales,promotion and pensions. It took the airline four years to switch to a common Passenger Service System,which allows passengers to book tickets on either of the airlines’ networks.

When former civil aviation minister Vayalar Ravi faced the heat from unions,he decided to appoint a committee,headed by retired Supreme Court Justice Dharmadhikari,to look into HR integration,harmonisation,pay parity and level mapping.

In the case of the latest strike—a manifestation of unresolved issues arising out of the HR integration—called by 240 members of IPG,the underlining theme was career progression vis-a-vis their counterparts from the erstwhile Indian Airlines. Before the pilots decided to call a flash strike by reporting ‘sick’,the IPG presented a list of five demands to the management,on which negotiations were held for nearly a week.

THE DEMANDS

IPG says its demands have been misunderstood. It denies that the debate revolves solely around their opposition to their counterparts from Indian Airlines getting to train on the yet-to-be inducted Dreamliner aircraft,the first of which is to be inducted in the fleet by May-end after a delay of over three years. Air India ordered the Dreamliners in 2005,before the merger.

IPG had presented five demands to the management before it went on strike. The first was that the management must guarantee that IPG co-pilots would be notionally promoted to the next level—that of commander—within six years and would be eligible for benefits like higher pay packets and allowances. According to IPG members,an Air India co-pilot takes nine to 10 years to become a commander whereas an Indian Airlines pilot,unionised under the Indian Commercial Pilots’ Union (ICPA),takes five to six years as the latter has a bigger fleet and hence needs more commanders. IPG pilots worry that if ICPA pilots get to fly Dreamliners,they will have to wait longer to be commanders. Their second demand was for all the routes of the combined entity to be divided into ‘West of Dubai’ and ‘East of Dubai’,where IPG gets to fly to the former and ICPA to the latter. While their second demand was rejected,the management agreed that co-pilots would be notionally made commanders after 10 years.

The IPG’s third demand,and the one that came in for much criticism and ridicule,was their insistence on being allowed to fly first class while on duty,which too was turned down. The other two demands related to clearing arrears and banning ICPA training to maintain inter-line seniority.

THE DIVIDE

The merger has only reinforced the geographical and cultural divide between those from the Mumbai-based Air India and the Delhi-based erstwhile Indian Airlines. “We are from Bombay,we are outsiders,camping in this city for the last five days where nobody is willing to meet us,” says an IPG leader. “But ICPA,which is based out of Delhi,has better networking and is closer to powers-that-be,despite the fact that in the last few years,they are the ones who have gone on strike repeatedly.”

They say while their union was de-recognised and 71 of their members sacked within the first week of the strike,the management adopted a sympathetic approach towards ICPA when they struck work twice last year. “To placate them,the government guaranteed minimum flying hours and additional allowances,” says an IPG leader.

But the government differs. “It’s not true that ICPA has more access. It was IPG which was the errant party this time; if it was ICPA,the same treatment would’ve been meted out to them,” says a senior civil aviation ministry official,who had steered the negotiations with ICPA during their strike last year.

Another reason for the harsh action on IPG,says a top government source,was that the international routes operated by them accounted for nearly 80-90 per cent of the airline’s total losses. “The government is convinced that if it comes to shutting down the international operations,it would not bat an eyelid. There is no sympathy in any quarter. The Prime Minister’s Office has already conveyed its mind to this effect,” the source says.

This is what irks the IPG. Its leaders claim that most of the senior management or Executive Directors handling key Human Resource functions are those from the erstwhile Indian Airlines. Executive Director-Industrial Relations and ED-Personnel too are former Indian Airlines. IPG says ICPA is gunning for all that they have (the Dreamliners) and lately their uniforms too.

As IPG members say,it is impossible for an IPG pilot and an ICPA pilot to be in the same cockpit—the divide runs so deep that it may be impossible to fly the aircraft safely. In the airline,there is a distinct hierarchy amongst pilots. “An Air India pilot looks down on his counterpart from Indian Airlines,” says a government source.

A Dharmadhikari committee member told The Sunday Express that harmonisation is impossible without pilots of both airlines being able to fly a common fleet. “We are convinced that there has to be cross utilisation and intermingling between the two sets of employees. Everyone should get an opportunity to fly abroad,the renumeration should be equal. Human interference should be eliminated. Instead of duty rostering by pilots themselves,it should be done by computers,” says the member.

Minister Ajit Singh told The Sunday Express that Air India would shift to a computer-based rostering system soon.

A WAY OUT?

In its report nearly two years ago,a parliamentary standing committee headed by CPI(M) leader Sitaram Yechury had recommended that the government should give “serious consideration” to running these two airlines as separate functional units under a single holding company. The Dharmadhikari report borrows the idea while maintaining that there should be two separate lines of seniority for pilots alone.

The parliamentary panel report of 2010 dismissed the merger as “neither visible in the air nor on the ground.” While noting that HR integrations posed a “serious challenge”,the report said that resolution “may take years” and go well past the government deadline. It said most of the wage agreements arrived at before the merger had led to “anomalous” situations.

On the issue of wage agreements—which IPG bandies about claiming that these assure its pilots the exclusive right to fly the Dreamliners—CMD Rohit Nandan points out that nearly 80 per cent of the IPG pilots joined the airline post-merger and that they are not part of this agreement.

Under Ajit Singh,who took office in December last year,the government has toughened its stance on strikes. Singh had publicly admitted that the merger was a failure and that the country did not need a national carrier. This stand is diametrically opposite from the one that the UPA government had maintained in its last seven years,equating the carrier with national pride.

“This minister is neither a Bombaywallah nor a trade union leader. He doesn’t have the considerations that his predecessors may have had. His vote bank and his constituency are least affected by the antics of the pilots of this airline,” says a bureaucrat,commenting on the government’s swift action against agitating pilots.

Singh echoed the larger public sentiment when he said in Parliament that the recently approved Rs 30,000 crore financial restructuring package was probably the airline’s “last shot” at survival. But the larger question of fixing a merger gone horribly wrong remains unaddressed.

What the striking pilots want ?

1. IPG wants its co-pilots to be notionally made commanders within six years; management agrees to ten years and assures it won’t take longer

2. Allow First Class travel for pilots flying on duty; management says no

3. Divide Air India’s foreign routes into West of Dubai and East of Dubai,reserve former for IPG; management says no

4. To maintain interline seniority,stop ICPA pilots training; management says no

5. Clear arrears of a few members; management agrees.

Unfinished task

Indian Airlines was merged with Air India in August 2007. While government claims 70 per cent of issues arising out of merger have been resolved,the most vexed ones related to HR are pending.

Airline mergers globally

1. Air France-KLM merger (2004)

Considered a success

One holding company with two separate operating companies

Wage agreements with pre-merger entities continue

Mixed training courses and best practices exchange

2. Canadian Airlines-Air Canada merger (2001) Considered a failure

Initially Canadian Airlines operated as a subsidiary

Was later fully integrated into Air Canada

In 2003,filed for bankruptcy protection

Turbulent HR experience with unions