Friday, June 2, 2023

Air India readies 8-10% pay hike on rising competition

MUMBAI : Air India Ltd will soon announce salary hikes across verticals, starting with pilots, as competition heats up in the industry over cabin crew and pilots. It will be the first performance review by the Tatas after taking control of the airline. Increments are likely to be 8-10% to bring parity between expats and Indian pilots, an industry insider aware of Air India’s plans said.

“The first round of hikes may be over the next couple of months. Pilots will be the first to get hikes. Salary corrections will also take place for the cabin crew and other officers,” he added.

According to an Air India executive, pilot shortage is the key reason behind the decision to raise salaries. “Pilot shortage is causing a rethink in airlines’ strategies. The reason behind the increase in salaries is primarily to retain talent from joining another airline in India or abroad. As Air India has placed a big order, it will need capable and reliable resources to operate that equipment.”

In February, the airline announced plans to recruit over 4,200 cabin crew trainees and 900 pilots in 2023, in its efforts to start new domestic and international operations. The announcement followed a mammoth order from Air India for 470 aircraft from Boeing and Airbus to add wings to its growth plans. The airline also has options to buy 370 more planes under the agreement signed with aircraft manufacturers. Air India had earlier said that it will lease 36 aircraft, of which two Boeing 777-200 LRs have already been inducted.

The pay hikes will not have any bearing on salary structures of pilots and cabin crew who are with Vistara, as the latter remains an independent entity and its merger with Air India will take place after regulatory approvals are in.

Indian airlines are expected to place orders for 1,500-1,700 planes over the next two years, aviation consultancy firm CAPA India-Centre for Aviation said in a report. At present, airlines in India have over 700 commercial aircraft in operation and 1,000-plus planes have been ordered.

With this, airlines are increasingly wary of competition and are planning to secure their crew to handle the volumes. The larger worry is for the wide-body fleet, operated by Vistara and Air India, as pilots often leave for the middle-eastern airlines due to lucrative offers. “The hike has been planned to assure the pilots of the vision of the Tata Group for Air India. It is expected to help pilots have confidence in the group at a time when other airlines are hiring,” another Air India executive said, also seeking anonymity.

Air India did not respond to Mint’s queries till press time.

Since the Tatas took over Air India, it decided to align the benefits and salaries of its staff. The airline, which until a year ago had around 8,000 permanent employees, is also looking to bring it down by another 2,000 as part of a second voluntary retirement scheme (VRS). 1,500 employees had opted for the first VRS in July 2022.

“We are looking at what we do differently moving forward. One, we need to attract and retain talent to support our growth and improve our capability. We need to adopt a more performance-oriented culture with clear objectives, and consequences for any under-performance,” chief executive officer and managing director Campbell Wilson had said in February.

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