Plane drivers

Are the pilots right?

Unions are a pain for any management, but to fire pilots for starting a union sounded extreme. Apparently, it was set off because the relations between management and pilots soured when Jet wanted to cut back on pilot pay.

However, I wasnt too comfortable with the idea of going on a pseudo strike and causing inconvenience to the general public let alone losses to Jet. But I was simply stunned when I learned that pilots make as much as 10L per month. Yes, per month. Some might make less but nothing below 3-5L. I heard Naresh Goyal on TV say that people making that kind of money shouldnt be exploiting rules intended for blue-collared workers. And that sounded logical. (Let me get this out of the way. I did feel pangs of jealousy on hearing the size of the pay packet.)

So the point is, do employees with six-figure salaries really need unions?  Such people have high intellect and specialized skill sets that cannot be easily replaced. That also means they have plenty of employment options. Their thought process is broad enough to consider the possibility of job loss and save for the rainy day (which bluecollared workers may not or even cannot). But airlines is an oligopoly, and one that is not doing too well. As it is, you have no  more than 5-6 airlines in our country with the majority of them losing money. While airlines may not be able to join hands publicly, they can still work behind the scenes to keep salaries down. A couple of years ago, our own IT companies agreed not to poach from one another, and have repeatedly stated that rising employee salaries are a concern.  Whether such moves amount to collusion or cooperation is a matter of debate.

I think the pilots are right in forming a union to maintain the power balance, but in the process have shown that they are no more than simple plane drivers. That is, they are no different from a railway motorman or a crane operator  who will find himself at sea should he be let go. It is not a skillset that can be transferred to a different industry.

The problem with airlines...

Pilots declare strike. Management threatens. Pilots go on mass sick leave. Management sends doctors to their homes. Had it not inconvenienced so many travelers, this was just the kind of comic relief to lighten up these gloomy days of recession.

Today's strike aside, most airlines worldwide are headed for a disaster. I think the problem is lack of creativity. Airlines is a boring industry in every aspect. They are highly capital intensive and are subject to several regulations due to safety concerns. Consequently, they are "boxed" within a certain framework with very little room for creativity. Take the safety instructions by the crew before takeoff for example. (It is only Southwest that has managed to break out and the results are there to see.)

Even the names are boring. Jet Airways, Spice Jet, Indigo, Go Air. One would be pardoned for concluding that the law requires airlines to include either Jet or Go in their names. Even worldwide, the names are surprisingly drab. Except for Virgin which has gone to the other extreme, and following in its footsteps, our own Kingfisher.

Contrast it with how IT firms are named. Apple, Sun, Oracle, Google, Adobe etc. Except for Microsoft, no one felt the need to announce what business they are in, let alone where they are from. Whereas for airlines the preferred choice is the nationality of the airline followed by "airlines".

The only way the airlines can come out of their perpetual slump is by hiring a software CEO.

Indian Airlines

Well, I will claim to have successfully predicted that the proposed airline strike will invoke a sharp reaction from the government. If I got it right, I am sure it was plain obvious to everyone. As it happened, the airlines themselves were not united, and the strike has been called off.

What I like about such failed attempts is that they succeed exceedingly well in making the point. With losses mounting and what not, the last thing airlines need is the hassle of refunding fares to passengers. They just wanted to prick Praful Patel's butt and make him lose sleep on a few nights. Mission superbly accomplished.

What now? Mr. Patel says no bailout for private airlines. And that's fair enough. I am no expert on this industry, but Spice recently posted a profit and thats good enough for me. It indicates, if managed well, there is scope for improvement. On the other hand though, globally the airline industry is a disaster. But still there is a Singapore here and a Southwest there that defies the trend year after year after year. Airline CEOs need to roll up their sleeves and get creative about fixing the issues. Laying off employees and asking for price cuts on jet fuel is lazy management - these are the two biggest expenses, and if u reduce expenses, u make profit right? Wrong! The industry needs some fresh bottom-up thinking. Although not as fresh as Capt Gopinath's I guess, who is blamed by some for the mess we are in:)