After KFA, unpaid Jet, AI pilots threaten to strike

The problems just keep piling up for the beleaguered aviation sector.

After Kingfisher Airlines, it’s the turn of Jet Airways and Air India to feel the heat (more than usual anyway). Pilots of all three airlines are disgruntled over the fact that they’re not being paid their salaries on time.

According to a report in Mint, Jet Airways’ pilots are scheduled to meet airline chairman Naresh Goyal over salary delays; on Wednesday, they had raised the issue with other top executives, the newspaper said.

The report said the pilots, who have not been paid their March salaries, had plans to stage a symbolic protest by wearing black bands, but without disrupting flights. The plan has been put on hold until the meeting with Goyal takes place.

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Some of Air India’s pilots have also threatened to go on strike from 1 April if they don’t get paid.

In the case of Kingfisher of course, unpaid pilots are not the only problem. On Wednesday, the airline suffered the ignominy of being booted out, for the second time, from the global ticketing system for not paying its dues.

According to two media reports, the International Air Transport Association (Iata) suspended Kingfisher from its international payment gateway for defaulting on scheduled payments. That means international travel agents will no longer be able to take booking for Kingfisher flights. The airline, however, said its flights would continue to operate “normally”.

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Making matters worse, fuel supplier Hindustan Petroleum Corporation also halted fuel supplies to the cash-strapped airline for non-payment of dues (again), according to a report in Business Standard. The airline is currently operating just 28 of its 64-strong fleet; the lack of fuel could force it to ground more aircraft.

It feels like things are coming to a head in the sector, but really, the agony is likely to be prolonged. Given the changing political equations because of the UP election results, which further weaken an already weak central government, it remains to be seen whether reforms such as allowing foreign airlines to invest up to 49 percent in local carriers will actually be passed.

A reduction in states’ sales tax - one of the main culprits keeping the cost of aviation fuel high in India - also seems unlikely. Allowing direct imports of jet fuel looks like a non-starter as well, since none of the airlines have the infrastructure to benefit from the move. Besides, states that stand to lose sales tax because of direct imports (imports for direct consumption are not subject to sales tax) look set to slap an ’entry’ tax to make up for their revenue loss, so there may be few savings for airlines from direct fuel imports.

As Firstpost has noted before, a toxic mix of bad corporate management and bad government policies has grounded the high-flying ambitions of almost all the key local carriers, barring Indigo. The pilots might be the latest to join the growing list of those who have not been paid by airlines (in the case of KFA, the list already includes fuel suppliers, banks, lessors, tax authorities and airport authorities), but their protests are unlikely to change the situation much.

For now, both the government and airlines are happy to blame each other for the mess the sector is in. While the government is hoping that airlines take more action to resolve the slow-grinding crisis, the airlines are holding back waiting for the government to do the same. Meanwhile, everyone else - pilots included - continues to suffer.