DH Deciphers | The troubles facing Air India since acquisition by Tata

Earlier this month, budget carrier Air India Express cancelled around 260 flights from May 8 to May 10 as staff went on mass sick leaves. And earlier, between April 2 and 5, Vistara cancelled upto 150 flights for the exact same reason. In this edition of DH Deciphers, Abhilash Reddy explores the troubles inside the airline brands owned by Tata Sons, ever since it acquired Air India, and decided to merge the national carrier with Vistara, and Air India Express with Air Asia India.

What was behind the mass sick leaves among Vistara and Air India Express (AIX) crews?

In simple terms, pay and working hours. The acquisition of Air India by Tata Sons and the ongoing merger of the full service airlines and the budget carriers meant that a section of pilots, cabin crew and ground staff would lose out in terms of pay parity.

In AIX’s case, since the mass sick leaves started, causing problems to thousands of travellers, the management decided to sack around 25 employees. After the government’s intervention and conciliatory discussions between the management and the employees union, which is controlled by Bharatiya Mazdoor Sangh, the sacked workers were re-instated and all those who had called in sick agreeing to rejoin operations. Normalcy was resumed by May 12.

An official statement from the Air India Express said, ” A section of our cabin crew reported sick at the last minute, starting last night, resulting in flight delays and cancellations and guests impacted by cancellations will be offered a full refund or complimentary rescheduling to another date.”

What has happened since the acquisition?

Tata Sons, through its wholly-owned subsidiary Talace Pvt Ltd acquired the 100 per cent stake in Air India and its subsidiary AIX in Jan 2022, after its winning bid of Rs 18,000 crore was accepted by the government.

Apart from the proposed merger and the concomitant disruptions to the status quo, the discontent among the cabin crew stemmed from an alleged breakdown in communication and relations between the cabin crew and management, exacerbated by unresolved grievances and alleged discrimination. In early 2023, the Air India Express Employees Union (AIXEU) wrote to the management and raised Industrial disputes with the Labour Commissioner

Meanwhile, in early April, the Directorate General of Civil Aviation pulled up Vistara after complains that many pilots had hit the maximum permissible limit of 100 hours of flying per month. Part of the reason for dissent among Vistara crew, especially pilots, was that compared to earlier norm of paying pilots for 70 hours of flying allowance per month, the management decided to cut it down to 40 hours.

What has been the government’s reaction

In cases of cancellations in both Vistara and AIX, the Ministry of Civil Aviation took cognisance of the issue and sought reports, explaining in detail the factors which led to cancellation of flights, from the carriers. Acknowledging the gravity of the issue, MoCA urged the airlines to resolve the issues forthwith to minimize the inconvenience to the passengers. It had also drawn the attention of the airlines to the regulations which ensure that passengers are treated fairly and receive proper assistance/refunds during flight cancellations or delays. The government is reportedly keeping a close eye on the merger process, especially since it is the office of the Labour Commissioner which had to get involved and broker peace between AIX and the employees’ union.

What is the way forward?

In the town hall meeting earlier this month, Air India CEO and MD Campbell Wilson along with Vistara CEO Vinod Kannan held a one-and-a-half-hour long townhall meeting with the employees of both carriers about the proposed merger.Air India and Vistara together have more than 23,500 employees.

Over 7,000 staff were assessed and their fitment to be completed in June, as per the sources.The roles and responsibilities of these employees, including the flying staff, will be clear by the end of next month. In February, Air India had announced a mega aircraft deal for full-service and budget carrier roles. It is in the process of acquiring a staggering 470 planes – 250 from Airbus and 220 from Boeing.