Tuesday, July 01, 2014

Air India may hire more cabin crew to raise standards

Air India's top executives are set to renew discussions on hiring additional cabin crew as a way of "improving service standards" after the national carrier recently joined global airline group Star Alliance 

The airline's customer-service division has raised the issue but no number has yet been proposed to the human resources department.

The proposal would go against the grain of Air India's efforts to cut its massive wage bill. The airline hasn't made any such recruitment in the past few years, though a proposal had been made last year too to hire cabin crew.

Air India has 3,400 cabin crew of its own and another 800 on contract. Before getting into Star Alliance, the airline had an internal target to cut the number to 2,100. The Director General of Civil Aviation (DGCA), India's aviation regulator, has stipulated a minimum number of cabin crew for each aircraft type, but airlines usually deploy more. "For instance, for a 787 Dreamliner, the minimum number is seven, which can be increased to nine. But now there may be a proposal for 11". 

Air India on June 23 became the 27th member of the alliance, which includes Lufthansa and Singapore Airlines. Air India has in the past six months terminated 45 cabin crew on ground of absenteeism and will be serving final notices to 59 more over the next month and half. Air India — once synonymous with its royal mascot, the Maharajah — has in the past seven years made heavy losses after a hasty merger with erstwhile domestic carrier Indian Airlines.

The airline has been hit by high by high fuel costs and tough competition but is also plagued by overstaffing. Being state-run, it also has to operate on some unprofitable routes. It has been working hard to reduce costs. Last January, it implemented a 25% salary cut across employees, although it also promoted 6,000 of them. It eliminated several perks, including one that allowed employees to get cash against sick leaves that they didn't avail of.

Air India's salary bill has reduced by Rs 400 crore in two years to Rs 3,100 crore in the fiscal year ended on March 31, 2014. Its revenue per employee increased to Rs 99 lakh from Rs 59 lakh in 2011-12, while expenditure reduced to Rs 13 lakh per staff fromRs 17 lakh. Its losses last year reduced by a quarter to about Rs 4,000 crore. Air India currently has 23,034 employees, down from more than 33,000 at the time of the merger.

The carrier in January hived off its ground handing and engineering operations into two separate units. Barring employees in those, its headcount is just above 13,000, the executive said. It also employs 3,500 on contract and 2,200 casual labourers