Air India’s Pilots Decline To Bid For Airline

Air India is looking for new stakeholders to take a share of the airline. However, it doesn’t look like most of the carrier’s pilots are interested in the offer, with two pilot unions standing in opposition to the move, for now. These unions have requested that its members stay away from the employee consortium bidding for the airline. The deadline to submit expressions of interest is December 14th.

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Some Air India employees are looking to invest in the airline, while two pilots’ unions oppose the idea. Photo: Getty Images

Pilot opposition to airline investment

It looks like Air India’s employees are divided over participating in the divestment process of the national carrier. According to Telegraph India, a section of the employees, led by the top management of Air India, plan to bid for the Maharaja. Meanwhile, two pilot unions together have expressed opposition to the move due to some unresolved issues.

The Indian Commercial Pilots’ Association (IPCA) and the Indian Pilots’ Guild (IPG) are the two groups asking their members to stay out of the bidding process to acquire 51% of the company. On the pro-investment-side, Air India’s Commercial Director, Meenakshi Malik, has asked the airline’s employees to submit documents and contribute Rs 100,000 ($1,355) each towards acquiring a 51% of the company.

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Air India has struggled financially in recent times largely due to the rise of budget airlines in India’s domestic air travel sector. Photo: Kentaro Iemoto via Wikimedia Commons 

The pilots’ unions oppose the move, instructing their members not to acknowledge Malik’s letter until there is a resolution to the issue of pay cuts and withholding of 25% arrear (back pay). Telegraph India obtained the letter by the pilots’ unions that was sent to their members:

“All pilots are advised not to acknowledge or participate in the process initiated by the management official till the disproportionate 70% pay cut for pilots vis-à-vis Air India’s top management officials (10%) is addressed…Also, there is no clarity on the payment of the illegally withheld 25% arrears due to the pilots to date while we approach the deadline of December 14 for the submission of bids for Air India,”

The bid to acquire part of Air India

The Telegraph also obtained a copy of the initial letter requesting employee investment from the airline’s Commercial Director. It reads as follows:

“The ownership of the company is what we are bidding for and, thus, we are negotiating with our financial partner so that our employee-management consortium will collectively own and control [the majority] of our airline…In order to acquire this 51% of the company… each of us will have to make a contribution of no more Rs 1,00,000 to bid for the company… Until we cross Stage 1 (EOI stage), no monies are needed to be collected from the employees,”

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In January of this year, the government began Air India’s divestment process, inviting bids for its share of the carrier. Air India employees are looking to acquire this controlling share of the airline. Photo: Anna Zvereva via Wikimedia Commons

Could the arrangement still come together?

It’s possible that this consortium could still pull things together. After all, it looks like pilot-union opposition isn’t about the bid itself but rather outstanding issues it has with airline management. Of course, with just eight days remaining to submit an expression of interest, resolving a pay dispute might be too big a task for such a short timeframe.

It could also be possible that enough money could be raised without full employee participation, requiring others to contribute more than was originally requested.

We’ll just have to wait and see what happens in the coming days.

What do you think of employee-based ownership of the airline? Should it move forward? Let us know your thoughts in the comments.