What started as firing of 3 pilots of Jet Airways for starting a trade Union has catapulted into a huge storm for whole of Indian Aviation Industry.
Airlines are going to suffer and suffer badly due to this !
The events in last couple of months seem to have bought aviation employees together. According to the report in ET – 50,000 airline employees in India are coming together to form a nation-wide trade union that will represent pilots, engineers, maintenance staff, cabin crew and ground handling staff.
Jet Airways Pilot strike as well as Air-India strike were successful to say the least. Jet Airways lost at least Rs 400 crore due to the five-day strike in the first week of September, while Air India lost Rs 100 crore from the four-day strike later in the month.
Not only did it put the airlines on the back foot, but with this new development the aviation companies seem to have attracted a persistence long term problem – yeah, I call it problem – I will tell you why.
Aviation Industry is already reeling under heavy losses, which have accumulated to more than 10,000 crores. Cut Throat competition amongst all the airlines have seen air-fares drop drastically over last 3 years. Adding to it is the global downturn, which has reduced the passenger volume. Aviation fuel prices are not getting any cheaper as well.
In view of this, pressured Airline companies had to cut losses, by reducing staff, bringing down employee perks as well as their salaries.
However, with this new development, they are now further restricted in taking any severe actions to bring down their costs, related to their employees, as they will be looking at Industry-wide shutdown which would be disastrous (in case of a complete strike by this potential all Indian trade Union).
So what does this mean to us? It means we will be looking at air-fare hike, without which Airliners cannot survive.
I really think if Jet Airways would have resolved the issue amicably it would not have come to this. Although, there is a mixed opinion about who was wrong and who was right in case of Jet Airways strike, the company stands to loose a lot than it bargained for.
What are your opinions? This All India Airline trade union is good or bad for Industry?