Airlines divided on impact of Jet deal

Airline managements are divided on the likely impact of the settlement of the Jet Airways imbroglio, with some carriers fearing that “collective bargaining” by employees could “ruin” the industry, especially during the current downturn.
While no one is ready to go on record, a CEO of a private airline said: “It’s is not the question of whether they have a union or not, but the issue is that collective bargaining by employees will ruin the industry. In fact, any dream of airlines like Air India restructuring will now be thrown out of the window.”
However, CEOs of low-cost carriers (LCCs) are not so worried and say the problem which hit Jet is typical for full-service carriers (FSCs), which are desperate to cut costs. Says a director in a leading LCC carrier: “The problem actually affects FSCs, as they have offered certain privileges like 5-star hotels, free holidays, etc, to pilots which they are now being forced to withdraw unilaterally, as they try to reach LCC costs. In the case of LCCs, the pilots already know they don’t have these privileges from the very outset.”
Some CEOS concede they cannot avoid pilots having collective bargaining power and have to live with this global reality. Airline experts say the Jet agreement is significant for the industry, as private airlines do not have a structured grievance redressal system.
However, trade unions are peeved at the possibility of the union being disbanded.
But other aviation unions say the success of the pilots is key for the benefit of customers.
14/09/09 Surajeet Das Gupta/Sreelatha Menon & Mihir Mishra/Business Standard

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Categories: Indian Aviation- In General Sep 2009, Jet Airways Sep 2009