Pilot’s Strike has brought Air India losses to the tune of Rs 300 Crores

Air IndiaAir India Pilot’s strike has devastated the business of Air Indiar, the seeds of which were sown at the time Air India and Indian Airlines were merged together. The 21 day strike by pilots of national carrier has mounted losses to more than Rs.300 crore (about $55 mn).

“Current losses are more than Rs.300 crore. The losses are on accounts of ticket cancellations, unused labour and bulk of Boeing-777 fleet being grounded,” a senior Air India official told IANS.

“Bookings on our international flight have stabilised and we have placed maximum number of seats in the lowest price bracket… that has also helped bookings in the domestic sector as well in the current contingency plan,” he said.

The airline had decided last week to reduce fares by placing a large chunk of seats under the lowest fare category to augment its share in the domestic and international sector.

The airline had the fourth-largest market share in April at 17.6 percent, preceded by SpiceJet at 17.7, Jet Airways at 21.4 percent and IndiGo at 23.8 percent.

Apart from the new fare scheme, the airline will shift to a truncated interim schedule for June 1, whereby it will drop seven international destinations, which include Hong Kong, Osaka, Seoul and Toronto, from its regular routine. The airline will then operate only 38 services instead of the regular 45.

Currently, the carrier is operating through a contingency plan under which a bare minimum number of flights are maintained by clubbing operations to various destinations in Europe and the United States.

Air India has maintained that it has enough executive pilots to operate long-haul destinations in the US and Europe.

The development comes even as the Air India’s board met here to consider several proposals to normalise the airline’s international operations that have been crippled by the 21-day ongoing pilots’ strike.

Among the several proposals being mooted to restore the passenger carriers’ includes wet leasing aircraft from other airlines. The proposal, according to officials, will include renting of aircraft with pilots and cabin crew.

“There is a proposal to wet lease at least five aircraft with pilots and crew. We require pilots and crews to maintain operations to key destinations in Europe, US and south east Asian destinations like Hong Kong.”

The board is also expected to decide on the induction date of the Boeing 787 Dreamliner into the carrier’s fleet and a voluntary retirement scheme (VSR) for employees.

“This is the first time that VRS is being proposed for AI employees. It is a big step for cutting manpower in the best possible way,” a senior civil aviation ministry official told IANS.

“If it gets through, the scheme will be put forth for approval of the government as special provisions for funds would have to be made for the same.”

VRS or ‘golden handshake’ is often described as the most humane way to reduce the existing strength of the employees.

The scheme will be meant for the executive cadre of the airline which includes the management. It will not be applicable to the operations arm that has pilots, engineers and cabin crews within its fold.

The scheme is part of the company’s turnaround plan which was approved in April by the cabinet.

The airline’s current workforce stands at 30,000. Of this, 19,000 will join the hived-off maintenance, repair and overhaul (MRO) and ground handling (GH) business.

The board will also decide on the date of induction of the Boeing 787 Dreamliner into the carrier’s fleet and the normalisation of international operations that have been crippled by the 19-day ongoing pilots’ strike because of which the airline has lost Rs.290 crore in revenue.