Saturday, 27 October 2012

Many Airlines in Crisis due to Global Aviation Recession



American Airlines Crisis is biggest, Air India and Kingfisher are also in crisis but AA and  AI crew command higher market value


Massive wage cuts imposed on American Airlines workers

Using the threat of bankruptcy as a hammer, union officials and American Airlines executives this week collaborated to push through $1.8 billion in wage cuts and other concessions on employees at the world’s largest airline. The deal reached by the unions representing pilots, flight attendants, mechanics, baggage handlers and other ground workers will cut wages between 16 and 23 percent, impose further benefit and work rule concessions and slash thousands of jobs.

The takeaways are part of the massive cost-cutting and restructuring campaign being carried out by the airlines—with the full backing of the Bush administration—to restore profitability at the expense of their workforces and the traveling public.


Officials from the Association of Professional Flight Attendants (APFA), whose members were the last to hold out against the concessions demands, repeated management’s bankruptcy threats. Union spokesman George Price warned that concessions would be “much worse than what’s in this proposal” if the company were to go under. John Ward, the union’s president, sent an email earlier in the week to members, saying, “We are angry with the company for taking this approach and we’re sure you are as well. But we can’t afford to let that anger dictate our actions.”



Air India staff, often seen as relatively dowdy compared with the suave Kingfisher crew, are heaving a sigh of relief . By virtue of working in a public sector organisation, their jobs are secure, and their comparatively higher experience means they command a higher market value.

In contrast, Kingfisher employees are struggling to make ends meet, though things have gotten a bit better, as the management has just cleared payment of salary arrears.

Both airlines have had salary and staff issues in common. Both airlines have not been able to pay their employees for months together in the past, inciting numerous protests and strikes by workers. But while Air India salaries are higher than the market average, they are also sure to come through from time to time due to government support.

On the other hand, till just a few days ago, it was touch and go as to whether the dues of Kingfisher employees would come through at all. "There are workers' issues here too, but comparatively we are in a much better position than Kingfisher employees. We get late salaries, but we do get the full amount now and then," an executive pilot from Air India said, adding that this is the unanimous view of the entire AI workforce.

As of now, Air India is yet to clear five months of salary backlog but the company is doing it very slowly. Kingfisher staff says that most of them have been breaking fixed deposits and using up other savings during the past seven months of going unpaid. The airline has not given form 16 to its staff since 2009, which is making it difficult for them to avail even bank loans.

Even though income tax authorities recently freed Rs 60 crore that Kingfisher Airlines owes in taxes to the government on humanitarian grounds, this has not been passed on to employees as salaries. While Kingfisher Airlines' owners' son Siddharth Mallya, for whom the carrier was an 18th birthday present, is hunting for models for the Kingfisher calendar in London, the airline's flying permit has been suspended and workers still don't know when they will be paid in full.

Another Air India employee related a colleague's story: "One of our friends left AI due to salary issues and joined Kingfisher Airlines last year. Now, he is in a complete mess and looking at him we know it's better here. We are in more demand than Kingfisher crew and have more opportunities." In the last couple of months, 15-20 commanders have left Air India and joined Gulf carriers like Etihad and Oman Air.

Insiders say an equal number may leave soon because these foreign carriers are expanding overseas operations with the help of wide-bodied Boeing (777, 747) aircraft. But Kingfisher pilots, on the contrary are all ATR or Airbus-320 pilots, suited for short and medium haul flights. "It is difficult for 500 of us to find opportunities as the industry doesn't have space for so many of us," a Kingfisher pilot said.

Meanwhile, experts also feel that the comparatively older Air India cabin crew are more experienced in terms of air safety than their younger Kingfisher counterparts.

"The role of cabin crew is air safety. I would feel much safer with AI cabin crew in an emergency situation than young Kingfisher cabin crew, who are inexperienced. Big airlines across the globe like Lufthansa, Turkish Airlines, Air Canada etc prefer having older cabin crew on long-haul flights for this reason," said travel technology solutions provider Bird Group ED Ankur Bhatia.




Shekhar Gupta
CEO
Capt. Shekhar Gupta [ Pilot, DIAM, M.Ae.S.I., MAOPA [USA] ]
shekhar@aerosoft.in 
Blog : http://shekharaerosoft.blogspot.in/ 

Shekhar is a Professional Pilot with more then 8 years experience of Flying on 14 different types of Air crafts in 10 different countries with accident free flying record. Shekhar is good in Flying Training as well as in Ground class for Pilots. Shekhar started his flying career from Skycabs [Colombo ] and worked for many Airlines Training Companies from different part of the world. He trained more then 350 Pilots who are flying world wide. He is a member of Aircraft Owners & Pilots Association [ USA], Royal Society of Aeronautics [ UK], Delhi Flying Club, Aeronautical Society of India, MP Flying Club Indore, Aeronautical Research Society. He is a frequent flyer on AA, Air India, British Airways, Cathey Pacific, Delta Airlines, Emerites, Ethihad, Jet Airways, Kingfisher and many more. Shekhar is an active member of www.MissionToCanada.com  set up by Govt. of Canada and Air Transport Association of Canada.

His recent passion is Aviation SEO for which he takes classes for IIT & IIM students in India and others in abroad. And www.AirAviator.com  a new proposed virtual Air Charter Services.



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