Tata’s Runway Success

In 2012, the management of government-owned air india was down on its knees as the bulk of the Maharaja’s international fleet was grounded for 58 days as the Indian Pilots’ Guild (IPG), a trade union of the airline pilots, struck work. Air India was estimated to have lost Rs 600 crore in revenue in this period, leading to the management sacking 101 of more than 420 pilots associated with the union. But within a year, all pilots, except 13, were reinstated by the Ministry of Civil Aviation.

Eleven years later, in April 2023, the Air India management—now part of the Tata Group—faced another threat of industrial unrest. Fireworks were expected when around 1,300 pilots, belonging to the IPG and the Indian Commercial Pilots’ Association (ICPA), its other union of pilots, announced that they would go to any extent to oppose the management’s proposal to implement revised terms of compensation.

The world watched how the Tata Group—known for its harmonious relations with unions in different companies—stood up to the challenge posed by the strongest and among the last surviving unions in the country.

Having taken over a company that had incurred accumulated losses of Rs 77,953 crore by the end of 2020–21, this new contract was a necessary step—so the Tatas claimed—to bring a uniform culture among all airlines under the group’s aviation portfolio. The showdown was expected. Passengers were jittery about booking Air India flights, and industry watchers from across the globe were excited to see the Tata playbook of dealing with an elite group of workers who knew about their rights and were not afraid of facing the axe to defeat the iron hand of capitalism.

But, in less than a month, even before the two unions could plan their moves in the game, the Air India management checkmated them, writing the obituary of a Nehruvian era’s legacy that once invoked fear in the heart of industrialists in India.

Interestingly, the management did not have to sack any pilots. Neither did it have to seek a court’s intervention. The airline’s human resources department did not even sit down to negotiate with the unions. What, then, led to the complete surrender by the unions? Was it due to the Tatas’ benevolent capitalism that has defined the group over the last 150 years? Was it the realisation among pilots that with changing times, they must change too? Or were there historical fault lines within the unions that were exploited by a smart management?

The story of this bloodless coup has elements of surprise and immaculate planning with a high dose of irony.

Battle of the Worldviews

When Air India was privatised in January 2022, the government mandated that no retrenchment would take place in the airline for a year. The Tata Group agreed to the condition. This assurance was important in winning the trust of the unions at the time of the transfer of ownership. This was necessary for the new management, because the unions had been at the centre of the government’s failed attempts at selling the national carrier. But even after the first year of the takeover, sacking staff would mean the airline management risked being called anti-worker, a risk that would have tainted the Tata legacy of pro-employee policies.

So, when the Tatas took over Air India, the management was willing to work with its unions. In fact, Tata Sons chairman Natarajan Chandrasekaran wrote a letter to the IPG in February 2022, thanking the union for its support to the new management. The ICPA was also acknowledged; Campbell Wilson, the new CEO of the airline, sent a letter saying as much. Tatas have an over 150-year-old image to protect as a brand that accommodates trade unions within its vision of progressive capitalism. For example, the trade union at Tata Steel, which celebrated its centenary in 2019, last held a strike in 1928.

But such celebrations are good with pliant unions, and the ones at Air India have been the most potent in the entire country. With the management’s vision to turn the airline into an aviation behemoth that can dominate the Indian and international markets, time is of essence. On April 17, 2023, more than two months after the one-year moratorium on retrenchment ended, the management issued a revised contract to the pilots that proposed to fundamentally change their status within the organisation. The new contract had the persona of a smart human resource honcho imprinted all over it. It offered the pilots better compensation and faster promotion in the larger Air India entity that is proposed to include Air India Express, AirAsia India and Vistara.

The new contract and its proposed benevolence made the unions suspicious. They were upset with some of the clauses in the new compensation structure. While it guaranteed payment of flying allowance for a minimum of 40 hours every month—an upgrade from the existing minimum of 20 flying hours a month—the pilots wished to go back to the pre-Covid arrangement of minimum flying allowance for 70 hours every month.

Under the new contract pilots who had served four years at the commander level were being promoted to senior commander. This move means that such pilots are being moved from the workman cadre to the executive cadre. A move that most read as a deathblow to the unions because executives cannot take part in union activities. The Air India management did not respond to a query by Outlook Business on the reason for expediting promotions for commander pilots.

To those pilots eligible to become senior commander, the management came straight to the point and proposed: “As a Senior Commander, which is an executive role, you will be part of the management. You will be required to carry out directives of the management, ensure implementation of the policies and safeguard the interest of the Company. In your role as an executive, you will not take part in trade union activities.”

The pilots were not amused. Their discontent was the focus of a three-page joint statement issued on April 19. It read, “Where is the company requirement all of a sudden to forcibly ‘promote’ almost all the permanent workmen of the union to the so-called ‘Senior Commander’ management cadre? It is clear from all this that there is a concerted effort to gut the unions and isolate pilots into individual boxes where they can be exploited and victimized at will by the HR department. This amounts to Unfair Labour practices.”

Immediately, an Air India spokesperson confirmed the unions’ worst fears and said, “A large number of pilots and cabin crew have already accepted the new contracts, and the salary improvements and advancement opportunities they enable. The airline will continue to engage with the remainder of its staff through this process as currently there is no recognised union in Air India.”

Chandrasekaran and Wilson’s letters apart, the airline management has been refusing to acknowledge the existence of the two unions at various forums, while pilots’ bodies maintain that they are essential to the culture and history of the airline.

In the initial days of the conflict, sources within the unions confide that pilots were willing to forgo promotions and even higher pay to continue being part of the unions. “The pilots and the management have opposing motivation factors. While pilots are concerned about the safe journey of flights, the management is driven by commercial interests. When the management forces pilots to push their limits, they need a platform to voice their concerns. That is where the unions come in. Without workers’ rights, there is no union to provide checks and balances,” says a member of a pilots’ union.

The pilots’ unions alleged in a letter addressed to Air India’s chief ethics counsellor Gurjot Malhi that the pilots’ en masse promotion was an unfair labour practice, which was aimed solely at tearing down the unions. “By turning workmen into executives, the management is trying to take away the protections we enjoy under the Industrial Disputes Act. This is nothing but an attempt at killing the unions,” says the pilot mentioned above. He adds that the unions’ resistance to the revised terms is not about the change in the pay structure, as was widely reported by media, but about the protection of workers’ rights. But the events that unfolded in the first ten days of May were in deep contrast to this sentiment of protecting workers’ rights.

Recognition of Rights

Sources point to how the Air India management refused to engage with the pilots’ unions much before this latest standoff started. In December 2022, the ICPA initiated conciliation proceedings with the Air India management before the chief labour commissioner as the union had disagreements over changes being made to pilots’ rosters and career progression policy. Soon after, the IPG also started similar proceedings. The management argued before the chief labour commissioner that it did not recognise either of the pilots’ unions. In one case, it even remarked that the union was under an “erroneous presumption” of the airline still being a public sector enterprise. Following this, the management did not take part in the conciliation process any further. The management reasons that the unions do not represent a majority of the pilots of the airline.

Senior advocate and trade union activist Sanjay Singhvi does not see the management’s withdrawal from the conciliation process as a significant development. He says, “Whether the management takes part [in the conciliation process] or not is of no consequence. If it does not appear [during the proceedings], the conciliation officer will send the matter to the government to be referred to an industrial tribunal or labour court. The award of the court will be binding, whether Air India agrees or not.”

Legal experts say that employers have no say in the legal standing of a union. “The employer has no right to derecognise a registered trade union. That can only take place in court, after required documents are shown whether the unions represent the workers or not,” says senior advocate Colin Gonsalves.

This line of legal interpretation of the employer-union power dynamics holds that unions derive their rights from Parliamentary acts, and, therefore, the option of resorting to a legal recourse remains open to the ICPA and the IPG notwithstanding whether the management recognises them or not.

Tata’s Man Friday Arrives

For the Air India management, dealing with aggressive unions and trying to revive a loss-making entity required a team of battle-hardened lieutenants, who are well-versed in the art of managing industrial relations. The airline’s new chief human resources officer (CHRO) Suresh Dutt Tripathi, who faced the ire of pilots in the recent conflict over revised terms, is a Tata Group veteran who oversaw HR operations at Tata Steel for eight years. When he was brought into Air India in May 2022, he was joined by Rajesh Dogra, who had spent 16 years at Tata Consultancy Services (TCS), Satya Ramaswamy, also from TCS, and Nipun Aggarwal, former senior vice president at Tata Sons, who joined Air India as chief commercial and transformation officer.

In addition to these Tata Group old timers, the new management also retained some senior executives who were already acquainted with Air India and its staff. It was believed that their familiarity would be of use in dealing with tough situations. This would prove to be invaluable foresight.

After their initial objections to the revised terms, the unions sought meetings with Air India’s human resource officials to address their concerns. But the management did not show any interest in negotiations and doubled down on their stance of not recognising the unions. Initially, the deadline for accepting the new contract was set for April 24. The next day, Air India pilots submitted an online petition to Ratan Tata, seeking the Tata Group patriarch’s intervention. Not surprisingly, their letter highlighted the Tata legacy of benevolence. The pilots wrote, “We believe that your benevolent leadership can help us find a solution that is fair and respectful to all parties involved.”

With the deadline now lapsed, and many of the union pilots yet to accept the revised terms, the management devised a new strategy that was partly built on an industry circumstance not of its making and partly around an old warhorse.

On April 27, the airline put out an advertisement seeking to hire over 1,000 pilots. To an outsider, it would seem that the airline was expanding its pilot force keeping in line with its ambitious fleet expansion targets. After all, Air India had placed a historic order for 470 aircraft from Boeing and Airbus earlier this year. However, the dissenting pilots felt that there was another, more destabilising intent behind the advertisement. “The mass hiring advertisement was brought out to strike fear into the pilots’ unions. It was the management’s way of causing a fear psychosis and making the pilots agree to the unjust new terms,” says a senior Air India pilot, who does not wish to be named.

Sources suspect that the Air India management wanted to take advantage of impending bankruptcy at rival airline Go First. The crisis put 740-odd pilots belonging to Wadia-owned airline on an uncertain turf. It was not surprising that Air India’s interview call got an overwhelming response, making Air India unions feel uneasy.

While the walk-in interviews for the pilots’ positions were taking place at one end, the pilots’ unions were still trying to arrange a meeting with the airline’s human resource team. Although it was earlier reported that CHRO Tripathi would sit down with the pilots, the Tata Steel veteran never showed up, say multiple sources to Outlook Business on conditions of strict anonymity. They add that there was only a video message from him which did not address most of the objections raised by the pilots.

Interestingly, the management arranged for Capt. Rajwinder Singh Sandhu, the chief of operations at Air India, to host a virtual town hall with disgruntled pilots on May 4. While many questioned the move to rope in Sandhu, others say that the answer lies in his curious track record at Air India. Having served the airline as a narrow-body pilot for a long time, he was first appointed as the chief of operations in July 2020 when Air India was still under government control. He became one of the few old-timers whom the Tatas chose to retain. Having completed 58 years, Sandhu also became one of the prominent beneficiaries of the airline’s amended retirement policy under the new regime. It allowed select pilots to serve till the age of 65, up from the earlier limit of 58.

Insiders say how the town hall was scheduled specifically for the purpose of managing the conflict over the revised terms for pilots. They add that the move was inspired by the management’s belief that Sandhu would invoke a sense of relatability among the pilots. The Air India management did not comment on this. A key factor to Sandhu’s selection as the mediator could be his close association with the ICPA in the past. In fact, he was terminated from the post of deputy general manager of operations at Air India in 2011 after he endorsed the ICPA’s demands during a strike called by the pilots’ union. It is also worth noting that the 2011 strike was called by the ICPA seeking status parity with the IPG pilots.

Now, in his avatar as the chief of operations of the Tata-led management at Air India, Sandhu was given the task of convincing the two pilots’ unions to withdraw their objections to the revised terms. Over 1,900 people belonging to various operations teams were part of the May 4 virtual meeting with Sandhu. Sources in the meeting relay to Outlook Business how several questions posed by pilots in the chat box were ignored by Sandhu during the 30-minute meeting, while he repeatedly assured the pilots that the revised terms would not harm the pilots in any way. As a fellow pilot, he asked the unions to place their trust in him and to “take a leap of faith”. “Sandhu … was sent for the town hall meeting because he was someone who could persuade the unions. It was a tactical move by the management to pacify the pilots. People ended up believing that there must be some truth in what he said,” says a pilot who attended the town hall meeting.

Of Crisis and Opportunity

Perhaps, Sandhu’s bargaining with the pilots would have been less effective without the threat caused by the crisis at Go First. It had filed for bankruptcy two days before the pilots’ virtual meeting with Sandhu and within a week of Air India issuing advertisement to hire new pilots. The likely bankruptcy made hundreds of narrow-body pilots readily available to be hired by Air India. The potential exodus of pilots from Go First lengthened the queues for Air India’s walk-in interviews for pilots so much so that the latter had to extend the interview process in Gurgaon by another day.

“The fact that they are lining up for vacancies at Air India without even receiving no-objection certificates or the training fee bond they paid up shows how desperate they are. This was, of course, a cause of worry for pilots here,” says an Air India pilot associated with the ICPA. In an industry that has seen cut-throat competition and limited opportunities for over a decade due to the 2008 global financial crisis and then the pandemic, the fear of losing one’s job to a more desperate pilot from a rival airline was enough to break down the morale of the Air India pilots.

At this point, three developments converged in favour of the Air India management and against the unity of the unionised pilots, even if not all of them were planned: Sandhu’s background as a narrow-body pilot and past association with the ICPA; most Go First pilots belonging the narrow-body category; and, a history of differences between the ICPA and the IPG.

As the formal and informal negotiations between the management and the pilots progressed, a feeling took root among the ICPA pilots that the narrow-body pilots of the ICPA had more to lose than the wide-body pilots of the IPG if the dispute persisted. Go First’s fleet is entirely composed of the narrow-body Airbus A320 aircraft. In Air India, out of the total 118 aircraft, the largest share is occupied by Airbus A320, flown by narrow-body pilots. The walk-in interviews, thus, made the ICPA pilots insecure. On the other hand, industry experts observe a shortage of supply of wide-body pilots in the Indian aviation market, which gives relative security to the IPG pilots against any potential coercive tactics.

With odds stacked in its favour and sensing the mood of division among pilots of the two unions, sources say that the management decided to set May 12 as the new deadline for pilots to accept the revised terms. Air India did not comment on why the pilots were given a second chance. Some pilots claimed that this was done to sow the seeds of doubt in their minds. On May 9, it was also made clear to the pilots that the ones who accepted the new contract before the initial deadline would receive revised pay April onwards, while it would be applicable to new signatories from May onwards. A ploy to create FOMO among the undecided pilots, say sources.

“At the end of the day, we have to take care of our livelihood in such an uncertain, fast-changing industry. The management may have bluffed us with the [hiring] advertisement, but the Go First issue made things tricky for pilots,” admits an ICPA pilot who signed the new contract only after the Go First fiasco happened.

Ghosts from the Past

A week after the town hall with Sandhu, the two unions organised a virtual joint meeting on May 11. A little over 450 pilots attended the afternoon meeting, though the two unions boast of a membership of over 1,300. Contrary to what was initially reported in the media, sources attending the meeting say that there was no poll conducted to see how many pilots wanted to sign the new contract. Instead, the poll was more nuanced and intended to ascertain the sentiment of the attendees. The organisers asked two questions to the pilots, whose responses were recorded in Google Forms. The questions were (a) “Have you signed or are you considering to sign the ‘Revised Terms of Employment and Compensation Details’?” and (b) “If not, are you willing to continue fighting for your rights to any extent as decided by the union/ association?”

Although only about half of the total attendees were considering signing the new contract, most of the union members gathered at the meeting were not willing to escalate the matter into a strike. There were multiple reasons behind this choice, says a senior pilot, who witnessed the pilots’ strikes in 2011 and 2012. “Most pilots did not want to risk losing jobs, as has happened in the past. Also, it was decided that we did not want to cause any harm to the company or passengers, notwithstanding the management’s apathy towards us,” he says.

Many pilots who attended the meeting say that it was the ICPA members who were more jittery as they felt that they had more at stake. The IPG’s predicament of having to abide by the fear felt by the ICPA members is ironic if one looks at the history of the two unions. It was the IPG that had waged a war against the Air India management in 2012 for training the ICPA pilots to fly wide-body Boeing 787 aircraft. The ICPA pilots belonged to the erstwhile Indian Airlines, which was merged with Air India in 2007. In fact, most strikes at Air India in the post-merger period were a result of the friction between the two unions. For instance, in 2011, the ICPA protested the pay disparity with the IPG pilots. Records suggest that back then the IPG pilots drew more than double the salary earned by those represented by the ICPA.

After the meeting, when Google Forms results were processed and sentiments assessed, the unions issued a joint statement withdrawing their earlier directive which asked member pilots to not sign the new contract. Now, with a little more than 24 hours left for the new deadline to lapse, union members were free to accept the revised terms, if they so wished. Interestingly, the statement credits the assurances given by Sandhu in the town hall meeting for the unions’ change of heart.

While one section of the pilots says that this was done to give the issue an amicable end, another group suggests that unofficial talks took place between some union leaders and the management. “There was a lot of politics involved in this decision [to give credit to the town hall meeting with Sandhu]. Sandhu has old ties with the ICPA, so they work with him on many things. It benefits him to come out of it as the hero who solved the entire situation. He earns himself a reputation within the management,” claims a pilot who belongs to the latter camp.

Divided They Fall

Within a day of the unions changing their stand, most pilots promptly signed the new contract, which included many senior pilots. This has made the future of the two unions uncertain, as many of their senior members will now become the executive cadre and lose their rights as union members. Old timers say that the apprehensions of the younger lot have brought about this situation. One such pilot, who has spent over two decades in Air India, says, “The May 11 decision was a retreat because some section within the pilots, especially young pilots, did not want to risk getting into trouble. Now, we are unsure about the unions’ future under the Tata management.”

The differences between the ICPA and the IPG are as much about the kind of aircraft their pilots fly as they are about the clash of cultures. The fault lines between the pilot groups that were brought together following the 2007 merger of Air India and Indian Airlines are yet to be mended. Old-timers feel that with the imminent merger of AirAsia India, Vistara and Air India Express within Air India, this clash will lead to further factionalism in the pilots’ unions and associations. “Following this episode [of the unions withdrawing their opposition to the new contract] and the merger of all Tata airlines, the pilots’ unions will get diluted. There will not be any actual union rights,” laments the senior pilot quoted above.

The legal disputes that arose out of that 2007 merger are still pending at various judicial bodies, and, in any case, not many pilots are keen on taking the legal route in the current round of dispute or for any future disagreements. “Young pilots consider it a big deal when they get a job in this competitive market. After spending a lot on their training, they do not want to risk it running behind lengthy legal processes,” adds another pilot who was part of the May 11 meeting.

While every union represents the interest of workers, not all workers are interested in making the same demands. This is why, perhaps, a protest that could have served the interest of the members of both the unions ended after one section of pilots succumbed to pressure, invalidating the reluctance of the other half in the process. Although the Air India management did not respond to a query by Outlook Business on the exact role played by Sandhu in choreographing this fall, it is evident that those at the helm of affairs at the airline know how to pick horses for courses. As a result, the May 11 Webex virtual meeting—which, ironically, had an access password “Long live unions”—could not even live up to its access code.

Perhaps, the younger generation of pilots is more practical and individualistic than its predecessors. Or perhaps the ideology that fuelled the unions in India is on the wane, evident from the decreasing number of Left-leaning political parties in the country’s Parliamentary democracy. The strikes that defined India’s corporate as well as government-owned companies between the 50s and early 2000s are no longer romanticised in popular culture. In fact, they are considered anathema in a liberal economy.

One thing that emerges from the veritable death of the Air India unions, that once controlled the destiny of the airline and was feared by most, is that the airline’s management exploited the historical fault lines among a motley group of pilots and convinced them to act against the famous Marxist cry: “Workers of the World, Unite!”