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Civil Aviation Ministry seeks an ‘anti-poaching’ deal among airlines

Industry experts, however, said any attempt to formulate such a law was untenable as it goes against the continued on norms of a free market.

By: ENS Economic Bureau | New Delhi |
March 6, 2015 4:16:33 am

In an unprecedented move, the civil aviation ministry is planning to put in place an “anti-poaching” arrangement that seeks to effectively bar airlines from poaching cabin crew and pilots from competitors.

Minister of State for Civil Aviation Mahesh Sharma indicated on Thursday that he wants airlines to give an “informal commitment” against poaching cabin crew and pilots from each other. “We will call all the airlines for a meeting on this issue,” he said.

Stating that the poaching of staff “results in crippling shortage of trained manpower for airlines”, he said, “We can ask the DGCA (Directorate General of Civil Aviation) to frame guidelines to address this matter.”

The minister’s comments come close on the heels of reported delays in Air India flights, purportedly due to shortage of crew. Industry sources said newer airlines have also been facing a staff crunch due to aggressive poaching by larger competitors.

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Air India was recently directed by the Civil Aviation Secretary to hire 800 cabin crew members. The airline is also looking at recruiting 197 pilots.

Industry experts, however, said any attempt to formulate such a law was untenable as it goes against the continued on norms of a free market.

“Such a pact would interfere with freedom of trade and profession of cabin crew and pilots. It will be against their service contracts. It is a non-starter. The role of the government is to regulate and not interfere in day-to-day operations. There should be free movement of capital and resources,” said Ramesh Vaidyanathan, managing partner, Advaya Legal.

“In a free market economy, pilots should be free to move across employers. Airlines that spend money on training etc can always recover the same in part or full, from departing pilots as per the employment contract. Pilots in India suffer an unduly high notice period of six months instead of two-three months,” said Amber Dubey, partner and India head of aerospace and defence at global consultancy KPMG.

Interestingly, in the United States, Apple, Google, Intel and Adobe are reported to be close to a $415 million settlement in an ongoing anti-poaching class-action lawsuit.

In 2011, tech workers had filed an anti-trust class-action lawsuit against Apple, Google, Adobe and Intel, alleging that the four companies reached anti-poaching agreements that resulted in less job mobility and lower salaries.

Apple and Google were also accused of signing one of the earliest wage-fixing deals in 2005. According to court documents, up to one million tech employees may have been affected by the agreements.

Meanwhile, Sharma said the government has “no immediate plans” to divest its stake in the national carrier or bring in a strategic partner. He also said it was important to have a national carrier and added that for the next six months the government’s focus would be to improve the on-time performance of the airline.

Another senior official indicated that the ministry would seek the Rs 1,900 crore in equity support later this year through the supplementary demand for grants. The budget allocation for the airline for 2015-16 stands at Rs 2500 crore against a demand of Rs 3400 crore. He also said Air India’s losses have decreased in 2014-15 due to lower crude oil prices and less currency fluctuation compared to 2013-14.

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