Monday, September 04, 2017

Fast-growing Indian airlines hit capacity limits

New Delhi: Air Asia India is looking for eight new pilots — and received 800 applications.

Some of these young would-be first officers have borrowed thousands of dollars to fund their training for a job at the Indian arm of the airline owned by Tony Fernandes, the Malaysian entrepreneur.

They face several rounds of technical tests and interviews. If they are successful, they have the promise of a job for life, a jet-setting lifestyle and a salary that should run into the tens of thousands of dollars a year.

But, while Indian airlines are being flooded by eager young recruits, they are having problems finding and retaining enough commanders with the experience to keep their aeroplanes in the air.

The problem has got so acute that the industry recently persuaded the airlines regulator to impose a new rule: commanding officers will have to give a year’s notice before they are able to leave their jobs.

“There are lots of people like me who want to come into the industry as an entry-level first officer, but what airlines are really looking for are experienced commanders,” says one of those applying for the Air Asia jobs.

He does not want to be named, as he has been warned that part of the selection process involves trawling the internet for candidates’ online presence.

“Airlines have been poaching each other’s pilots, and this move was meant to stop some of that,” he adds, referring to the one-year notice period. “But as far as the pilots are concerned, it is outrageous.”

Indian air passenger numbers have been growing by an average of about 16 per cent a year since the beginning of the millennium, boosted by ministers’ moves to liberalise civil aviation and encourage new carriers.

In recent years, this growth has been given further impetus by the fall in the oil price, which has lifted overall economic output and reduced costs for airlines. A handful of private carriers, of which IndiGo and Jet Airways are the biggest, have reaped the benefits.

Air India, the government-owned flag carrier, is also looking to hire pilots, although the debt-stricken airline is not growing at the same rate as its privately owned rivals.

Shares in Interglobe Aviation, which owns IndiGo, have risen 50 per cent this year to Rs1,220, while those in Jet, the second-biggest private domestic carrier, are up 61 per cent this year at Rs562.

Last year the pre-tax profits for both companies fell because of a recovery in the oil price, although for Jet it is only the second time in a decade it has made a pre-tax profit at all.

Private airlines have made plans for this expansion to continue over the next few years. IndiGo and its other low-cost rivals Spicejet and GoAir collectively have about 800 aircraft on order.

But as the number of flights has risen in recent years, companies are increasingly running into the limits of their capacity, whether in terms of number of aircraft, space at airports, or manpower.

 04/09/17 Kiran Stacey/Financial Times